The title of this article may have drawn you in because you know how important it is for you to start saving more on your small business expenses. But, you’re probably also thinking what most small and medium enterprises out there are:
“What’s left to cut that I haven’t already?”
Though you might think you’ve chipped away every unnecessary expense you possibly can, if you’re like most out there, there’s probably much more left inside the walls of your business to be put atop the chopping block.
Perform a thorough wastage audit on all your business expenses. This may sound simple and like something you would have already been keeping up on at this point. However, wastage is a big problem for most companies, especially SMEs who still do their own books and don’t have a business accountant to answer to.
A wastage audit includes EVERYTHING:
Supplier pricing (ie., too high)
Your Product/service pricing (ie., not high enough)
Employee wages (too high or too low can have an equally negative impact on your bottom line – ie., not working hard enough to justify the high salary paid, or not doing a good job because salary is too low for the level of work involved).
Hours of operation (ie., open too long to justify expense, or not open long enough to capture all potential business).
Operating costs (ie., rent/cost of ownership, utilities, Internet, phones, location – transportation costs to and from, size of business space – cleaning and other costs involved in maintaining large premises, insurance, subcontractor costs, state and local taxes, legal fees, and more).
Other (ie., catering costs, lunchroom supplies, magazine and newspaper subscriptions, courier services, transportation costs, and anything else that eats into your bottom line).
Even something as simple as buying a Keurig or other one-shot coffee maker can save money around the office. How many pots go to waste in a day because you have to keep a large pot of fresh coffee on the go, just in case you’re flooded by customers and for employees to keep their java fix in check?
2. Bulk Up for Bigger Savings
Did you know that some companies actually give you a better price when you buy more than just one thing at a time? Ask every vendor you do business with about the bulk savings they offer. Then sit down and figure out which of those deals makes the most sense for your company.
If office supplies are a big expense, call the places you do business with (and the ones you don’t to find better prices) and ask what sort of deals they offer on those items and how much you’ll have to buy to get the best deals. It might behoove you to spend $120 this month on more ink and paper, and not have to order more for the next three months, than it does to spend $50 a month – every month.
3. Cut Utility Bills in Half
Most small businesses just don’t think smart when it comes to keeping their utility bill optimal. Walk past three businesses that are closed for the night and you’ll find at least two bright lights coming from fixtures, computers, devices, or appliances that should have been turned off before the last employee left.
Shut off lighting and install motion lights for security. Turn off/suspend anything that is plugged into a wall. Turn the office fridge and freezer to the halfway point in their temp adjustment and leave them there.
A cheap programmable thermostat will let you plot out temperatures for every day of the week in your office. Turn up the heat/cold for when employees are in the office – shut the doors of those who aren’t in the office for the day. Turn the temp down/up to barely comfortable for when the office is empty, and schedule the up/down times to change an hour before people start to arrive in the morning to make sure the office is comfortable.
Employing the tips above can save any SME heaps of money month-to-month and year-to-year. And they won’t save every failing business out there, but if expenses are eating away at your bottom line, the advice on this page is a great place to start.