The Ultimate Guide to Cutting Business Costs
In business, profit is the name of the game. But growing profit isn’t all about growing revenue; it is also necessary to carefully monitor your business costs. Growing businesses have growing expenses, that is to be expected, but do not lose sight of your ability to cut costs in order to achieve a great profit margin.
Managing your expenses is easier said than done. To ensure your business is controlling and managing its budgets efficiently, it is essential that you find time to regularly review your finances. If a financial review sounds scary, let us be the bearer of good news; like the first Monday back at school after summer holidays, a financial review is less scary than it seems. It essentially needs to consist of your projections for the months ahead and a consideration of ways to reduce or control your expenses during these same months.
Focusing on increasing revenues is vital to grow a business. However, if you don’t keep a check on your costs, increases in cost will diminish your profits and business sustainability. It’s important to focus on your business profits.
A financial review could happen annually, bi-annually, or quarterly – but truly, the more frequently you are assessing your financial situation, the better. This means ensuring that you incorporate performance reviews to monitor progress of your business financials, which should lead to cutting costs in the most appropriate areas to ensure that your profits are increased and your business sustained over a long period of time.
Still struggling with those expenses? Here are some ways that your business can ensure that costs are kept under check:
1. Control your overheads
Overheads are those nasty fixed costs such as an office building, and electricity costs. You might not always think of them as a business cost that can be altered because they are so taken for granted, but overheads can be a significant expense for every business. If you own your business workspace such as your office building, look for better mortgage deals to ensure you are taking advantage of a better rate, and if you are renting, shop around to ensure you hire a workspace fit for purpose.
2. Negotiate credit card fees
If your business accepts credit card payments from customers, speak with your processing company and you might find that they would be willing to let you trade on a cheaper rate. Ask for an annual reduction in fees – what have you got to lose?
3. Go paperless
Have you considered going paperless? Not only will you save on the cost of realms of paper, you will also save the cost of the ink used when printing. With today’s technological capabilities, printing needs have shrunk significantly, and being a digital-only company also demonstrates to clients and consumers that your business is forward thinking.
4. Check your statements
Get into the habit of checking your financial accounts each and every month. As a minimum, you should review your statements once a quarter, but the more frequently you can do so, the more your costs will be driven down. Thoroughly checking your accounts will ensure that any stale payments that should not be occurring are picked up and stopped. With a little vigilance, you will make significant savings.
5. Re-evaluate your marketing spend
Advertising and marketing costs can be through the roof, so it is vital that you track your marketing expenses to ensure you are getting a return on your investments. That does not mean you should stop advertising, it means that you should evaluate all your advertising expenses to make sure they are worth your investment. Keep a tab on these expenses and you’ll be able to cut non-profitable advertising from your business, saving you money.
6. Business service providers
Whatever your business needs for service providers, don’t become complacent with your existing providers. Check that their rates haven’t crept up because you will always be able to find another company to provide the service at more competitive rates. Routinely check their prices and only settle for the best rates on the market.
There may be other areas that you can check in your business, depending on the type of business you run; the important thing is to ensure that costs are kept under control by reviewing your company finances on a regular basis.
We can help your business with quarterly performance reviews and monitoring to ensure your business makes a positive contribution to your bottom line. Get in touch today to find out how Ascend Twentyone can help your business.