Every businessman’s goal is to make higher profits. This can be done in several ways. One of them, which will be discussed here, is by reducing costs.
Before you do any unwanted changes that may have any negative impact on your business, take methodical and considerate approach.
You will be surprised that there are so many things that you might think are cheap, but in the end the overall costs are high. For example, sweets that you provide for your workers, or if you have dozen types of coffee for the employees. Narrow the offer.
It can be said that the only fixed cost is your staffing cost. You have to pay them what they earned, of course, but revaluate if they earn as much as they are paid. Some of the stuff you don’t need all the time, so consider hiring them part-time at any time you need them, on a sort of a freelance contract. Some of the jobs can be done from home, so offer your employees to work from home, and this will save them money they would normally spend on commuting. Having work-from-home employees will save you money, because you’ll need a smaller office, and you will pay less to rent this kind of office. Less employees in the office, less equipment needed such as computers, office furniture and so on. Consider flexible working hours for your employees, and avoid overtime at any cost.
Go paperless, if you can. Invest in computer network, and encourage the use of electronic documents inside the company, and in communication with the clients if it is possible. Print only what is necessary and what you have to according to laws. Send electronic invoices and encourage electronic payment. This will reduce costs you have for supplying with papers, printer toner and cartridges, staplers, paperclips, folders and it will reduce maintenance cost for printing equipment.
Energy and water bills are a significant part of all company expenses. Consider replacing all light bulbs with CFL (compact fluorescent light bulb), you’ll spend up to 60% less for lightning the office. Some lights can be switched on by sensor, and switched off by timer so you won’t spend more energy than you really need. Installing modern water saving faucets in rest rooms will save you more money. Checking office insulation and windows, and repairing it if needed can also save more energy.
Consider bulk packages when buying all necessary supplies for your company. That way you can ask for some discounts, and you can ask for an extra discount if you pay before the invoice due date. It may seem insignificant at first sight, but in the end, you will notice huge overall savings. Don’t rely on only one supplier, have a backup so you can avoid any extra costs that may occur if your preferred supplier has some problems with providing you with all the necessary goods or increases prices for the product.
Eliminate all the software that you don’t need. Surely, you have some software that you paid and it exists in your computers just in case you need it someday. It is an unnecessary cost. Get rid of it, and stop paying for something that you don’t use often. Consider using open-source alternatives, which are free in most cases, or much cheaper than well-known branded software.
Cut the business trips to a minimum. Plan the route sitting in front of the computer, and use GPS devices to navigate you thorough the least expensive route. It will save you the money, and the time as well.
If your company business is based lots on vehicle use consider having your own refueling station. You can surely have a better price if you buy larger amounts of fuel. Since diesel is the cheapest fuel, consider buying that kind of fuel. It is definitely easier to have your diesel refueling station as part of your company if your company’s business is vehicle based.
In the end, remember that every cost cut matters, and every percent counts when you see your yearly financial report where your profit is increased due to costs cut. Make sure you make a good calculation with everything you are planing to do and remember – without wise organization there is no such thing as a successful business.