As a business owner, you are in business to make more profit, of course. Therefore, learning ways to reduce operating costs and maximize profit will be of great importance to your business. It’s the only way your business will thrive. In business, even the smallest reduction in expenses can be a very impactful way to enhance business growth. If you are already in business and would love to see your business expand and thrive, you have landed on the right page. This post contains useful information that can help you achieve your business goals. Its time you learnt ways to reduce costs and create room for business growth.
Smart ways to cut business costs
Reduce production cost
As a business owner, always be on the lookout for ways to cut cost on raw materials and the cost of production in general. If buying in bulk will earn you a discount, then do so. Take full advantage of available resources before you think of buying new ones. If you have space you are not using, consider leasing it out to another business or an individual. Even if it’s small, it will still bring money into the business. Also, instead of throwing away waste materials, how about you look for ways to recycle them into a different product. You won’t only make money but you will also save the environment from pollution.
Consider an internship program
Starting an internship program is a win-win situation. Students get a chance to practice what they have learnt in college in a cool company and you get free labour to take up certain responsibilities in the business. Getting an employee to sort out some paperwork on your desk or run simple errands can increase operation cost for no apparent reason while you could have had an intern do the same without added cost to the business. Even if you see the need to give the intern some petty cash to motivate them, the amount cannot be compared to the salary you would have paid an employee. Besides, having interns in your business creates a platform for you do discover great talent in case you ever want to hire in the future. It will save you the cost involved in hiring and induction processes since you will have someone who already knows how things go in your business.
If you don’t have ways to source for interns, approach a few local colleges and offer to establish a mutual relationship. You will get interns to work for you and they will get an establishment to send their students to do their internship. You can also post adverts in various social media platforms. You will be overwhelmed by the response. There are so many young people who are willing to work in an establishment like yours in exchange for real hands-on experience and a shining recommendation letter.
Make use of a bonded warehouse
If you import goods, then services offered by a bonded warehouse can greatly assist your business to reduce operating costs. A bonded warehouse offers storage facilities to people importing dutiable goods from the day they are collected from the port of entry to the day you collect them for dispatch. The most impressive feature about a bonded warehouse is that they provide duty-free storage facilities until when your goods leave their premises. This is a plus to your business since it can help improve your business cash flow. It is a perfect solution to business owners who ship goods from overseas but they lack storage space or would want to spread out HMRC payment cost. Besides, bonded warehouses are secure, affordable and convenient to store your goods before delivering them to your customers.
When you opt to use the services of a bonded warehouse, your business stands to gain a lot from their services. There is a wide range of financial gains a bonded warehouse can offer to your business. For instance, it can significantly help reduce operation cost by delaying duty payments until when they are necessary. If your business is into importing and exporting good, delaying costs like custom duties and VAT can really help your business to grow. While bonded warehousing is to the right fit to every type of business, if you are into imports and exports, handle bulk or a huge volume of goods or you want a secure place to store your stock before dispatching them, then it’s the exact storage facility your business needs.
If you haven’t already then it’s high time you went paperless as a business. Ditching out that stone-age practice is the way to go if you are looking forward to growing your business enterprise. It’s not only the in-thing, but it can greatly help your business cut printing costs significantly. Why print all those copies to reach all your employees while you would have just done an email? It will be faster and much cheaper. Instead of using paper bills and invoices, take advantage of the available online payment options at a reduced cost. Email marketing can help you retain your clients and forget about mailing coupons which are not only expensive but also take ages to reach their destination.
Negotiate for discounts
Never feel like a weakly for simply asking for a discount. It’s your right as a client and it’s actually trendy. Thus, always have the courage to ask the seller whether you can get a discount. Discounts can really boost your business especially if you are a small business or are just starting out. Another thing you should give a try is bargaining. Don’t be quick to pay without negotiating for a better price. You may be surprised how low the seller can go. Also, check around for special deals. You can even sign up to retailers’ newsletter to be among the first to know when they are offering a discounted sale.
Buy used gadgets and furniture
Your office can still look elegant with used equipment and furniture as long as you have great taste. Instead of investing in luxurious designer items and your business is not yet well-established, be smart and look for used items probably costing half the price of new ones but are still in excellent shape. Therefore, don’t be so quick to buy new office equipment such as printers, faxes and computers before checking out what used equipment sellers have to offer.
Reduce employee turnover
A business that is always hiring and training new employees will greatly suffer from increased business operation cost more than most business owners would imagine. Furthermore, this can greatly reduce productivity because it will take time before the new staff understands the business operations and gains momentum. As a business owner, note that you incur unnecessary costs every time an employee leaves and you have to employ a new one. Hence, try as much as you can to retain the ones you already have.
If you make good use of the above points, you will realize your business is moving in the right direction within a short time.