Sometimes all businesses need to review their working practices with an accent on cutting expenditure. All companies are given to doing things the same way as they have been done before and this means that bad habits can be fallen into too easily.
Whether you run an agency franchise, a small startup or are a solopreneur, when looking to increase your competitiveness and profitability, it is always advisable to look at your cost base before considering sales price rises.
The following useful tips are great for any SME owner but are equally suited to larger organisations.
Don’t Cut Budgets Equally
When you need to save a nominal figure from your outgoings, it can be tempting to make a corresponding cut from every budget you have in the business.
Let’s say you identify the need to cut 10 percent from all company expenditure. You may, therefore, lower your marketing budget by a tenth, your component expenditure by the same amount, your staffing costs by a further 10 percent and so on.
This is not strategic cutting and can lead to problems with supplying customers down the line. Instead, look at the overall expenditure of each department under their nominal coding and work out where you can afford to make the cuts and where you cannot.
For example, if your business has over 100 employees, Advance Systems Inc would advise looking at ways to maximise your workforce management using software. Before you decide on your budget look to see if there are any other cost-effective solutions you could try, rather than making wholesale cuts.
Increase Your Warehouse Space Without Extra Overheads
When a company is expanding there seems to be a never-ending demand on your chequebook. If you need to expand to meet demand, one of the most costly decisions you can make is to acquire – or rent – additional space.
Whether it is for storage, production lines or for additional administrative space, the additions of a mezzanine floor into a business unit can all but double the available space.
Different companies offer this service, you can find mezzanine floors in Leeds by WSSL. With little initial outlay, they provide room for expansion but do so without extra heating, lighting and rental costs.
Do Deals With Neighbours
In your business’ vicinity, there will be like-minded entrepreneurs who are also looking to cut costs.
Even if they operate in a completely different sector to you, such business may have outlay on things like marketing that can be shared.
For example, if you advertise in the local press or do the occasional leaflet distribution, why not produce adverts and flyers together so that the costs of them can be shared?
If you have a neighbour working in a similar way to you, then look into sharing equipment costs as a way of lowering expenditure.
Reduce License Costs
Software is essential for most businesses these days. However, the costs of buying it and having sufficient licenses for all of your team can be prohibitive, especially when you need to keep renewing it.
Many software suites have freeware that is just as good, so keep an eye out for versions of what you currently use that is free to download.