National statistics may indicate that we’re in an economic recovery, but that’s no reason to get complacent about business costs. There’s still plenty of uncertainty regarding sustainable consumer spending strength.
The customers you have today are an opportunity to set aside profit for potential slowdowns in the future. This requires a focus on spending. By reducing costs, you keep more of your revenue as profit.
Looking at the Big Picture
Keeping a sharp eye on business expenses isn’t just an emergency measure, it should be your natural process.
Start by examining your largest categories of expenditure. These items are likely employee costs and rent. Next, determine the impact of immediately cutting these expenses. For example, if you have one less employee, consider how remaining staff will handle extra duties. Maybe a simple realignment of job responsibilities permits a staff reduction.
Eliminating employees is the right path if you failed to control past expansion of staff. Most of the ways you cut business costs are not as dramatic. Instead, there are tangential expenses related to staff functions.
Adjusting Your Processes
According to some sources, the average office employee uses 12,000 sheets of paper annually. All those printouts of email and attachments add up. You can reduce this cost by having employees operate a little differently and giving them some tools.
Store reports electronically. If personnel need instant access to reports while on the go, consider a cloud computing service. Invest in software for every computer that permits employees to print documents in an electronic format for immediate storage and future retrieval.
You can also reduce costs for mailing paper. Bulk rates are available for large mailings. That can lead to considerable savings for newsletters or a sales letter. Use email whenever possible, and be sure to ask customers for email addresses.
Reaching out to both new and repeat customers probably requires only a postcard instead of a letter. The cards are a lot cheaper. In addition, use online banking services to avoid mailing payments.
Going a Little Deeper
Employee benefits are another cost concern. Shop around every year for different health insurance coverage. You might lower the cost by increasing deductibles and giving employees another benefit with health reimbursement arrangements (HRAs). HRAs permit employees to receive reimbursement for their out-of-pocket medical expenses up to a specified annual limit.
Don’t forget about other types of insurance. Online quote requests instantly provide multiple options for business insurance coverage and price.
Or use an independent agent to conduct the search for an optimal policy.
Consider negotiating frequently with your mobile and Internet service providers for better rates and packages. Get bids from competitors.
If your business requires recurring travel, investigate the cost of videoconferencing to satisfy matters that demand face time.
