A new business has to watch every penny it spends. It isn’t one of the most glamorous elements of establishing a new business, but cutting costs and reducing expenditure is one of the most important elements. It will help you to increase operating revenue and profits, and it encourages you to get into good spending habits, which will prove just as important when you’re a global enterprise bringing in millions a year.
1 – Cut Down On Your Energy Spend
Energy bills keep rising, thanks to the increasing cost of oil and fossil fuels. Unless you can install solar panels and wind turbines on your grounds, this isn’t going to change. In fact, as governments are pushing for carbon neutrality, it is only likely to get worse. Ensure you have the cheapest deal for your energy usage pattern, use a programmable thermostat, install thermal blinds, and use sensor lights to cut business energy costs.
2 – Encourage Telecommuting
Telecommuting is increasing in popularity, but it still has a long way to go to become the norm. Modern collaborative tools and software are powerful and readily available, and they negate the need for employees to come into the office every day. It can improve morale while also cutting your overheads.
3 – Use Business Space More Efficiently
Look at your business space and consider ways to save money. Find a commercial property that is better suited to your needs, especially if you are paying more than you need to. Look for ways to introduce multi-purpose rooms, for example meeting rooms that can be used as break rooms.
4 – Look For Cost Effective Alternatives To Legacy Systems
Established businesses often suffer from the continued use of legacy systems. Virtually everything can be taken online or done digitally now. Use cloud based software, which can work out cheaper when you accurately determine the number and type of licenses you require. There are even cloud based telephony systems that could save you money, and you absolutely have no need for that fax line in the corner of the meeting room.
5 – Consider Buying Used Items
There is no requirement that you buy everything brand new for your business. Yes, brand new desks that perfectly match and incorporate your corporate colours look great, but they aren’t necessary. If you’re spending a lot of money on new equipment, consider buying good quality but used alternatives.
6 – Negotiate Deals When Paying Invoices Early
Speak to your suppliers. Many appreciate being paid early, and may be willing to offer some kind of discount or other benefit if you can see your way to paying invoices as soon as you receive them. Even if it’s a 2% discount, that soon adds up.
7 – Use Freelancers For One-Off And Occasional Work
Many businesses have need of specific skills on an occasional basis. It may be that you have landed a particular client that requires skills your existing team don’t possess, or you may have experienced unexpected growth and haven’t yet settled on exactly what you require from new team members. Consider outsourcing some of this work to freelancers, preventing you having to pay a full-time wage for a part-time or short-term requirement, which can be a major contributing factor to small businesses facing financial problems.