Bolstering your business’s profits is tough enough as it is nowadays. The problem is that as costs go up, so do our prices – in turn eventually affecting our profit margins. Cutting unnecessary expenses are just as important as increasing sales.
It can be tough to identify what expenses need to be cut. What is deemed “unnecessary”? If you’re looking for a long-term solution to reduce costs and expenditure, then read on to see how.
1. Move your processes into Software Automation
Labour is often one of the biggest expenses for a business to incur. Processes like time sheet errors are costly to correct and will take up significant amount of time cumulatively. Automating means creating an accurate and painless process that enhances productivity and performance.
Although setting up an automated software could be costly, it will save you a lot in the long run. From timesheet tracking to inventory management, most processes these days have automated solutions.
If you are looking for a solution for employee management, do check out this article on HR Automation. Malaysian companies like Kakitangan offer software for HR Automation. They also provide free template documents for small business owners.
2. Cloud-based storage instead of traditional filing methods
Having your head in the clouds is not the most practical way to spend your time, but putting your business on it is something else entirely.
Marketing advice gurus constantly preach about cloud-based solutions. A cloud allows users to store their computer networks, storage, applications or resources which are accessed via internet on another provider’s shared cloud computing infrastructure.
The typical cloud storage providers are Microsoft’s Dropbox and GoogleDrive. Depending on your needs, you may need to purchase extra storage. However, the initial space is free and usually enough if you’re storing smaller text-based or excel documents.
Additionally, cloud-based solutions also help you reduce costs on printing, filing and paper. Be sure to backup your files on hard drive and use strong passwords!
3. Cut employee expenses, not employees [restrict]
Though neither employers or employees want to reduce staff benefits, it may be necessary if your business is going through a tough period.
For example, if your business provides free meals for in-house staff, you may want to cut that down to just free lunch for them. It may seem harsh, but it will be easier if you can communicate this to your employees in a way that helps them understand why these measures need to be taken.
Between the lesser of two evils, downsizing benefits would be better than simply laying off your staff.
4. Go green!
Environmentally-conscious efforts are all the rage nowadays. Well, at least that seems to be the direction of we’re heading into.
If you have an office space, consider reducing energy usage. Compact fluorescent lighting may last long than regular light bulbs, and they’re also cleaner for the environment. Encourage employees and vendors to communicate through e-mail or other electronic means.
For restaurants, especially Malaysian ones, plastic straws will no longer be an option come 2019. The plastic straw ban means that restaurant owners will need to find other, more environment-friendly solutions. While this means purchasing costs may increase, there are options for reusable straws that will end up saving your business in time.
Cutting operating costs for your small business isn’t impossible, but it does mean making some sacrifices. Don’t be afraid to spend on services and people you require, but work-out the long-term implications of costs and expensive technology before moving in that direction.
Reducing costs for your business is not an easy feat. When considering eco-friendly options, most people think that these will end up costing them more. However, keep in mind that these options will open your business to a larger crowd, as the eco-friendly initiative comes with a positive association for small businesses.