Small Business Cost-Cutting Ideas
For any business, including a small business, to succeed, it needs to bring in more money than it puts out. Any good business attempts to maximize its income, but circumstances usually limit how much income a business can create. Another way to make more profit is to reduce business expenses.
Other People Are Reading
-
Cutting Down on Waste
-
Many businesses literally throw money away every day. By engaging in a careful inventory of your physical plant, you can be sure that you're not one of them. Replace incandescent bulbs with high efficiency bulbs; they cost more but last 10 times longer and put out the same light while using 20 percent of the electricity, according to the Energy Star website. Insulate your buildings for heat savings. Reduce, reuse and recycle materials of all kinds to reduce your waste removal costs. If your business uses vehicles, keep them well tuned and efficient. Consolidate delivery routes and get rid of one vehicle to eliminate insurance and maintenance costs.
Targeting Advertising
-
If your business advertises, spend some time finding out where that advertising is going and who is reading it. You may discover that you're paying to advertise to people who never buy your product. If you sell agricultural supplies, you're probably wasting money if you have ads in a student newspaper. Look into developing an online presence for your business, something that can be cheap or even free.
-
Reducing Carrying Costs
-
Every business has carrying costs, some of which are unavoidable. These include utilities, insurance premiums, interest on mortgages and business loans, and rent. Look into ways to reduce these as much as possible. For example, if you have vehicle insurance with one company and building insurance with another, you may be able to negotiate better rates by getting both from the same company. Look at your cable, phone and television service and determine if you're using them to your own best advantage. If you're paying money for 500 channels and never watch TV, you're throwing money away.
Layoffs
-
Layoffs are a last resort for most small-business owners, because it's never enjoyable to hand someone a pink slip. However, salaries are one of the largest expenses for a business, and if your business is in real trouble, a layoff can make a huge difference, particularly for businesses with only two or three employees. Cutting back employee hours is another option and may avoid the necessity of firing someone altogether. If you must lay someone off, try to do it on good terms; when business picks up again, you may want the person back.
-
References
- Photo Credit business colleagues preparing for business meeting image by Vladimir Melnik from Fotolia.com
