As a new or small business, it is crucial to remain profitable, particularly in these difficult economic times. While it is important to encourage more business to increase profits, another way to boost funds is by cutting expenses. No matter how large or small a company is, there is always a way to cut costs, so we’ve put together a list of six ways that you can do so effectively.
Use your space wisely
You probably have office supplies stored somewhere in your workspace, and if you’re a product retailer, you’ll have space for stock, too. By making efficient use of space, you can fit more supplies in the same footprint, which saves money on warehouse storage and allows you to keep more products on hand. This will also eliminate the added shipping costs that come with frequent reordering. If you have any unused office space, make it profitable by renting out or subletting it to a consultant or small agency.
Outsource nonessential functions
You can really boost your profits by capitalising on freelance talent and hiring contractors for part-time or short-term tasks. High-quality talent can be available at a cheaper rate on a consulting basis than as a full-time employee.
Outsourcing nonessential, ongoing functions, like payroll, to a third-party agency or administrative tasks to a part-time virtual assistant, are also cost-cutting measures that are seriously worth considering.
Lease a vehicle
You can reduce your overall tax bill by renting or leasing a vehicle, as it is deductible as a business expense. Businesses only pay tax if they are making a profit, so if your business is making a loss, minimising the impact of buying a new vehicle is likely to be more of a priority to you than borrowing money tax efficiently.
Whether you need a small van or something larger, there are many companies, like Leasewell, that will offer you a quote on renting one.
Always ask for a discount
Although they don’t always advertise it, many top retailers will discount their items for owners of small businesses – you just have to take the initiative to ask. Of course, you most likely won’t get a discount for a £1.50 pack of pens, but if you’re filling your office with new equipment or other highly priced items, you’d be surprised at a number of times you’d get a better deal for mentioning that you own a small business.
Cut out paper
While this seems like such a small change to make, it will really have an impact on your expenses. If you add up the amount that you spend on printing supplies, paper and labour, you’ll see that using electronic file storage can save you a lot of money. Make use of free online space through services like Microsoft Office Live Workspace, Google Docs and Dropbox, where you can easily save files and share them with colleagues.
Bring in interns
If you find that you can’t use a remote or freelance worker, and the job list continues to pile too high, you can easily call your local college or University and ask about using interns. You will be able to hire interns at a wage much smaller than the rest of your employees, and they will help you with the work while gaining experience for their CV. It’s a win-win situation for both parties.