Many businesses are failing today because so many have higher expenses than sales. Thus, while entrepreneurs should focus on increasing sales they should also focus on reducing costs to maximize profit.
This article will lead you through some good ways to reduce costs.
- EDUCATE YOUR EMPLOYEES
Educate your employees on the need to cut expenses to maximize profit which will ensure their salaries can be paid.
- TURN OFF ALL APPLIANCES WHEN THERE IS NO WORK GOING ON
Electricity is charged and paid based on consumption so why incur unwarranted charges when you can easily turn off appliances when they are not in use. Choose energy saving bulbs and appliances to reduce power consumption.
Sometimes we do not have to use our electrical appliances to get light and enjoy cool air, you can use the natural light (sunlight) and open your windows for natural air to save considerable costs.
- REDUCE SUPPLY EXPENSES
Ensure you have more than one supplier for a particular material or service, negotiate prices before buying anything and don’t just buy because they have been price tagged. Compare the prices of two suppliers and go for the one that can save cost for the same quality. Look out for suppliers that can offer you discounts.
- USE DIGITAL MARKETING
The world has gone digital, technology has evolved and made marketing cheap. Why pay expensive bills to advertise in hardcopy newspapers and magazines when you can showcase your goods to the world via digital marketing (online newspapers, Facebook, Twitter, Google, Instagram).
- REDUCE TELEPHONE EXPENSES
Instruct your workers not to make unnecessary phone calls and use more of text messages, whatsapp and emails. Assign someone that will monitor and attend to all incoming calls.
- USE COST EFFECTIVE PHONE TARIFF PLANS
Every service provider has their own charges for calls and other phone plans. Choose a cheaper plan that is good for business. Avoid joining any plan that will not profit your business.
- CHECK INVENTORY AND OFFICE SUPPLIES BEFORE REORDERING
To avoid stockpiling office supplies you do not need it is necessary that you set a minimum reorder level. Equipment can get damaged or develop fault when they are not in use.
- SELL REDUNDANT EQUIPMENT
There are several online platforms (OLX, jiji etc.) on which you can sell used equipment. To recoup costs Instead of throwing them away,
- MONITOR PAPER USAGE
The cost of getting paper for printing jobs in the office is quite expensive. We suggest you give each employee a certain amount of paper to employees or keep a track of jobs that are being printed to avoid unnecessary print out.
- OFFER PART-TIME JOBS
Not all jobs require professional or full time staff so you can hire college interns and students to do part time jobs or offer professionals jobs as part –time contractors or consultants. Hire freelancers, consultants or contractors to work for you from home so as to minimize number of staff. This will save you from paying huge salaries and renting office space to accommodate them.
- SHARE INTERNET CONNECTIONS AND PRINTER
Instead of purchasing multiple connections a single network connection can serve your organization and also a printer can be purchased and shared by multiple users. This will help to save cost.
- LIMIT TRAVEL EXPENSES
Avoid traveling costs by arranging virtual meetings and requesting reimbursements on travel costs from the client the travel relates to.
- SWITCH OFF WI-FI
Ensure Wi-Fi is pass word protected and turned off after close to avoid being charged unnecessarily by service providers.
- BUY FAIRLY USED EQUIPMENT AND FURNITURE
There is no rule that that states that your office must have a new shiny equipment and furniture. You can purchase nice fairly used equipment and furniture for your office use. It makes good cost saving sense to do this.
- USE A BLOG INSTEAD OF PAID MARKETERS
If you are running an online business, well written blogs enable your business to be found easily on the internet and reduce the need for many marketers.
You must understand that every business is different. For example, you can’t downsize your office space if you are working out of a home office, you can’t limit your travel expenses if your duties do not require you to travel.
What step have you taken so far in cutting down your expenses?