Your business insurance costs go up 10-20 percent per year. Your favorite airline is still adding “fuel surcharges” to your ticket after the price of oil has gone down by 50 percent. Your wholesale supplier has recently increased the cost of flour to your bakery business by 10 percent.
Small businesses are being constantly squeezed by increases in expenses, so controlling costs is more important than ever. The following tips will show you how you can reduce your business costs and improve your bottom line.
Lower your office space cost
Depending on the commercial real estate situation in your area, you may be able to take advantage of depressed prices for office space to move your business to less expensive quarters or negotiate with your existing landlord for better lease terms.
Better yet, if you don’t really need to run your business from commercial premises why not operate from your home or go mobile? As an example, a tech repair business can give up attempting to compete with big box stores selling computer equipment and operate mobile tech services that provide in-home computer sales, repair, and tutoring. Trades such as plumbing and electrical and services such as bookkeeping are ideal home-based/mobile business candidates.
Cut staffing cost
If your business has slow periods why not look at ways to reduce staffing costs? Use family members in your business wherever possible.
In the old days if you grew up on a farm everyone in the family worked on it. If you have children of an appropriate age, why not get them involved in your business wherever possible? Learning about business is excellent experience for young people and it keeps money in the family.
Have an unemployed millennial living in your neighbourhood with a degree and no job? Employ them in your business and give them some valuable work experience as well as boosting their self esteem.
Cut supply cost
When it comes to wholesale supply costs, every penny saved is a penny earned. If you are running a business such as a restaurant that regularly makes a lot of wholesale supply purchases getting the best deal on supplies can make a huge difference to the bottom line.
As a business owner this means that you need to be constantly monitoring supply costs by checking for discounts and investigating alternate sources. Some people find it embarrassing to ask for discounts. Don’t be – many businesses will offer discounts on products and services to other businesses. Just remember that you may need to reciprocate at some point!
Cut advertising cost
Most studies by business groups indicate that on average small businesses typically spend approximately 5% of revenue for advertising. This figure can be substantially higher for service businesses – which are typically higher margin-oriented or for businesses that are just starting out.
With more potential customers online than ever before, advertising does not have to be expensive. Start with building an online presence by creating a website and/or creating a Facebook page. Tweet about your business on Twitter, and create an email newsletter.
Cold calling, asking for referrals, and always carrying business cards are also inexpensive ways to increase your marketing profile.
We bet these tips are helpful. Share your thoughts in the comments section!