Your costs grow along with your small business, but it’s always in your interest to keep costs down where possible. However, overzealous cutting in the wrong areas can lead to a myriad of problems. Keeping costs low is important to maximise your profits and protect your small business against inflation, but you need to know how to do it effectively without hurting your productivity, reputation or staff morale. Here are some easy ways to control your costs to protect the financial health of your business.
1. Don’t Overlook Older Generations
It’s only natural to want flashy new equipment but technology moves at breakneck speed and if you want the very latest gadgets, you’ll end up paying extra for the privilege. Before you splash out on brand new technology, consider whether you really need the very latest hardware or whether a slightly older version will suffice. Buying a piece of equipment that’s just one or two generations older can often save you a significant amount of money without compromising your output.
2. Buy Second Hand Furniture
Buying office furniture and equipment second hand is a great way to cut down on costs. With a little effort and research, it’s easy to find pre-owned goods in great condition and it’s far cheaper than buying brand new furniture. Sites like eBay and Corporate Spec are a great place to start.
3. Reduce Energy Consumption
Going green can result in major savings for your small business. Energy is often one of the biggest costs for businesses, so employing more eco-friendly practices benefits your bank account as well as the planet. Switching to renewable energy sources, purchasing energy-efficient appliances and installing insulation can really cut your energy costs in the long run. Meanwhile, reducing paper waste and using LED lights can help you to cut your costs right now. It’s worth seeking the help of a professional who can conduct an energy audit and show you where you can cut down on power usage.
4. Cloud Computing
If your small business isn’t taking advantage of cloud-based software then it’s likely that you’re wasting money. Specialist software is pricey and involves hefty upgrade and repair costs, while using a spreadsheet to keep track of your income and expenses is extremely time consuming and will become unmanageable as your business grows. Cloud software subscriptions allow you to run applications and store data remotely, and are usually far less expensive than their traditional counterparts.
Reducing the amount of money spent on wages can also boost profitability when you draw the line on your finances. So, evaluate the daily tasks that your team members perform and look at some of your own duties as a business owner. In today’s environment, outsourcing is one of the best ways to cut costs. It’s also one of the smarter ways to hire as you may have access to a wider pool of experts. Properly executed, you can lower costs and maintain a high level of quality with outsourcing.
6. Tax Breaks
The more tax deductions you take advantage of, the smaller your tax bill will be at the end of the year. This sounds attractive, but most business owners are unaware of a lot of the lucrative breaks, incentives and loopholes out there. Although hiring an accountant does present an upfront expense, you’re likely to see a large return on investment when tax season rolls around.
7. Improve Your Time Management
As a small business owner, you invest your money carefully and it’s just as important to do the same with your time. Remember that there’s a different value attached to each task within your business and it often pays to delegate or outsource. You want to see the biggest ROI possible on your precious time so don’t waste it on tasks that someone else could easily handle and make sure you stay focused on your particular area of expertise.
It Pays to Cut Costs
Cutting your costs can result in a huge boost to your profit margin, so long as you’re smart about it. By following the above tips, you can expect to see an improvement in the financial health of your business without damaging your productivity or efficiency. Cutting costs isn’t always about taking a chainsaw to your budget; a few well thought out swaps and changes can make all the difference.