Are you looking for ways to increase your business profits in 2014? That may be difficult if your expenses are too high, so maybe it’s time to start thinking about what you can afford to cut. Whether you are a service provider, brick-and-mortar retailer or a small e-commerce company, ever startup has its own set of expenses. Many of these costs cannot be eliminated, but if you can significantly reduce them it could make a huge difference in your profits this year.
According to an article published by Fox Business, “10 Simple Ways to Cut Business Expenses,” there are several cost-cutting solutions that can make a difference in your business budget.
1. Outsource your workers.
While this may seem “Un-American” to some, contracting has become quite the trend in recent years. Many specialists actually prefer freelancing and short-term assignments because it increases their earning potential.
Plus, when you don’t have to pay several full-time salaries with health benefits to employees it will make your project more cost-effective. Outsourcing is also a great way to find permanent employees because you get to find out their working style before making a long-term hiring decision.
2. Hire interns & temporary staffing.
Companies that hire interns do a great service to the community by allowing college students to get valuable experience before graduation. Interns might still need extensive training but they can still get to work on a variety of tasks.
There are a lot of temporary staffing agencies that specialize in hiring qualified staff for specific projects. This prevents your business from cutting into costs by hiring a full-time permanent employee that you may not need in the future.
3. Use email instead of regular mail.
Whenever possible, send customer correspondence via email instead of the U.S. Mail. It is a lot less time consuming and will save you a lot of money over the long-term. Cutting out little things like this can make a huge difference.
4. Print less paper.
Every time you print something it uses up paper, ink cartridge and filing space, all of which are expenses you could avoid in this digital age. Even sales materials are often distributed via email and/or a jump drive. There is no need to print or store documents when they can be saved on a hard drive or scanned into your company’s computer system. Just make sure you back up your files and practice safe internet procedures to prevent hacking.
5. Negotiate lower interest rates on business credit cards.
Small business owners use a lot of consumer-oriented credit to pay for incidental expenses. If credit card interest rates are too high, this could make a serious dent in your corporate profit. Try to negotiate a lower rate with your providers and you will save a lot of money throughout the year.
6. Negotiate better prices from vendors.
Once you get a better interest rate from your credit card companies, why not take the next step and ask for better prices from suppliers? Most of the larger suppliers will be agreeable to this idea because they wouldn’t want to lose a regular customer.
7. Pay your invoices earlier than necessary.
Many suppliers offer a lower price for businesses that pay within the first few days after being billed. If you have the cash to spare, paying early will be a great way to build a solid relationship with your vendors.
8. Purchase used equipment instead of new.
As technology continues to improve, business owners can secure significant discounts on hardware and software that was recently upgraded. Used computers and other equipment might also be available used, even when it’s just a few months old. These products will come at a much lower price than a comparable product that is brand new.
9. Reduce your travel costs.
Online resources are now available that allow you to meet with clients virtually and conduct several online meetings in a single day. While this might not always replace meeting with them in person, it is a much more efficient option for today’s small businesses.
10. Allow telecommuting.
Some businesses pushed back at this idea initially, but now more and more businesses are allowing employees to work from home. You will see an immediate cost-savings on office space, as well as utilities and other office expenses.