All businesses are looking to increase their profit. One easy, quick, and proven way to meet that goal is by reducing spending and expenses. I know of businesses and organizations who shaved over $100,000 off of their spending in the first year following my tips.
Here are the my tips to reducing your overhead.
- Double check your budget and gain control of spending. Analyze your budget and buy only what you need. We recommend using Freshbooks to help get your business budget on track. Cash flow is king when you’re a small business, but like anything else, your outflows (liabilities) need to be less than your inflows (income). Instead of purchasing the next shiny object, give yourself a target with revenue. This will allow you to reward your business with the next level tool or nice-to-have.
- If possible, allow your employees to telecommute. This will cut down on office space rental, electricity, and may even boost moral among employees since they don’t have to pay for transportation. If you don’t want to telecommute but want a good space to work, look into a local work space where you can rent a desk or conference room. It could be a lot cheaper than renting or buying your own space.
- Print less and try to go as electronic as possible. This will keep you from having to spend money on paper, ink toners, and reduce how often you have to replace your printers and copiers. Believe it or not, but a lot of people still operate with a print-first mentality. Keep a tidier desk by using a scanner to scan business cards, receipts and other non-digital materials. Storing records is a hidden cost that can add up quickly.
- Barter. If there is another business that uses your services as often as you use their services. Look into bartering with one another. Trade marketing services with the office supply place or swap services with another vendor.
- Check out your return on investment with the advertising streams you are using. It may be that you are not getting your bang for your buck. Lots of businesses still invest heavily in legacy media like the yellow pages just because it’s what they’ve always done.
- Prioritize, delegate, and check on time management. It may be that the wrong things are being prioritized in the business or that time is being spent in areas where you are not getting any return. If you are a small business owner, you will wear many hats, and that’s okay. What’s not okay is your time costing you more than it would to outsource your bookkeeping or other service that someone could do better for cheaper.
- Pull out all your bills and make sure you know who you are paying what to (this goes along with the budget tip). Call up everyone you are doing business with and see if you can negotiate reducing your bill. I was able to do this recently with my cell phone bill! I am now saving $50 a month with more data on my plan by just calling.
Sometimes your profit gain is right there in front of you.
You may not have to take on more clients or work more hours. It may be that your extra money is sitting right there. All you have to do is pay attention and grab it.
Check out these other two posts to help your business reach its full potential: