How to reduce costs in your small business
Cost cutting is often the difference between a business that survives for the long-term, and one that quietly fades away. Small business owners must look closely at all aspects of their business; determine what is costing to much and how they can best reduce costs. However, it should be noted that any cost cutting should be done carefully and concisely. If you cut to lightly your small business may not survive, however, if you cut to deeply your business may not have the resources it needs to thrive and grow. With difficult economic conditions, most small business owners find that they must reduce overall costs. Here is what you need to know about how to reduce costs in your small business-
- Cut any unnecessary spending-If there are any luxuries in your small business, now is the time for them to go. While you and your staff may really appreciate them, if they are not an integral part of the job, and they are costing to much, you should eliminate or reduce them. Keep in mind that the items that should be considered are anything that is not affecting salaries. Cutting these type of costs often means the difference between laying off employees and keeping a full staff. If your small business has several departments, it can be helpful to have each department come up with unnecessary costs that can be cut.
- Cut your travel costs-Technology has greatly reduced the need to have to physically travel, for business meetings or conferences. You can use online video services to connect people, even halfway across the world. You can use this type of service to coordinate on projects, make sales proposals and other business presentations, for a fraction of the cost, of flying or driving to another location, staying in hotels, and all other applicable expenses. Another travel related expenses that should be looked at carefully, is any vehicle expense. You may want to purchase a company vehicle instead of reimbursing your staff, for any travel expenses.
- Cut back on staffing hours-This is cost cutting measure that will allow you to reduce your workforce expenses, without cutting jobs. You may need to look at your productivity schedule to determine if you really need the number of employees you have at this time. You should determine whether you can scale back on hours without scaling back on productivity. This can be a way to save jobs and save money at the same time. You may also want to consider extending your hours of operation and providing your customers with more access to you and your business. This way you have fewer number of employees in the office, but still cover an extended amount of business hours.
- Reduce but don't cut your advertising-Advertising and marketing are the lifeblood of your small business. Consider this-if your customers don't know where to find you and what you offer, how will you make any sales? Instead of cutting these functions you need to find a way to reduce costs, and make sure that the marketing you are doing is the most effective it can be. You may want to consider joining forces with any small business, for some co-op advertising. You can carefully go over all of your marketing strategies and only keep those that are showing a clear return on investment. You want to make sure that every marketing dollar is bringing you the most value that it can. You an focus your more of your marketing online, for a lower cost and a higher return. The only limits in reducing the costs of your marketing and advertising, is the limits of your creativity.