For small business owners: the cost of doing business
Every business owner runs into a challenge around the cost of business. The cost of doing business are unavoidable costs required to keep a company operational. Business owners can manage their costs by becoming present to several key principles.
Unavoidable costs include rent, utilities and payroll.
When managing costs, avoid cutting the quality of your products and service. You may discover that some costs cannot be cut without compromising your product. Nevertheless, there are plenty of areas where you can safely reduce costs. Let’s take a look at some of these areas.
1. Audit isn’t a dirty word. Don’t be afraid to take a close look – perhaps even bringing in fresh eyes from the outside – at your expenses. Getting present to where your money is going will give you an idea of where to look for savings.
2. Source alternative solutions. The services and products you’re currently contracting out may be available for a lower price elsewhere. Items like coffee, printing and cleaning services can yield savings. Check if your usual supplier can offer more economical rates rate or tap the market for new solutions.
3. Boost productivity. To get a bigger bang for your buck – generate greater outputs from the same inputs. Help your team members use their time more effectively. Implement new training, technology or processes to create more.
4. Reduce usage. Turn off the lights and lower the heat at night, print a little less, implement reusable tools instead of single-use items (mugs versus paper cups, for instance). These seemingly small changes add up quickly when everyone is following (or not following) them.
5. Scale your organization appropriately. Don’t create situations where any given employees has too few duties on their plate. Ensure everyone has enough work so that no one is idly wasting resources.
How is your business managing costs? Drop us a comment below.