- December 16, 2019
- Posted by: Asheesh Sinha
- Category: Business plans
When it comes to running a successful business, keeping costs down is key. Finding ways to reduce costs of operation can be an easy thing to do. Often business owners believe that reducing costs will also reduce the quality in their service or product, but that does not always have to be the case. Understandably, it can be a daunting experience when you are first faced with the challenge. Here are some of the best ways to reduce costs without sacrificing your business quality.
Throughout the past few years, innovations in technology have allowed businesses to reduce costs as well as improve customer service through the implementation of automation. One of the best benefits that automation provides is the elimination of human error. This, of course, can save a company thousands of dollars per year in inventory that would have otherwise been thrown out.
Another area that automation can be implemented is within your customer service. Utilizing chatbots provides you with a digital workforce that doesn’t need breaks or expensive yearly healthcare. Using automation condenses the number of platforms you use each day, by only streamlining one platform for all your activity. By using tools that automate your business, you can save time and labor costs.
A common error that new business owners tend to gloss over is their everyday supplies. These are often not even brought up because they are an essential part of the day-to-day operations of the company. However, if you ever sat down to really crunch the numbers, you can begin to see that these small costs do really add-up overtime.
So, what can you do to reduce company costs without sacrificing the use of these much-needed supplies? Go digital. Instead of mailing your clients their invoice, you can instead convert to sending them an email with an attached PDF file. Sending a digital invoice also helps you keep better track of your records. This can also be implemented within your own office. Think about how memos are sent out, how your sign-in process works, and even consider keeping an inventory of your supply closet.
Use Virtual Offices
A rising trend amongst many startup companies and even some of the more established is the use of digital offices for their employees. This is also known as working from home or remote employees. The main reason behind this is because renting or leasing out large office spaces can be very expensive. Virtual offices not only eliminate a large expense from your budget, but employees tend to be a lot happier overall. It’s also better for the environment because your employees are not commuting into an office.
What if you have to meet for a conference? This can still be accomplished through the use of various meeting facilities around your local area. You can all decide to meet at the owner’s residence, or if you want to keep it professional, business leaders can also utilize hotel conference rooms for a price less than leasing out an office space.
Offices are often busy with people coming and going at various times, and therefore many energy-consuming things get left on. The most common of these are lights. Just look around your office, you can be that you’re going to find a couple of lamps, desk lamps, and room lights on for no reason. Energy consumption is a big expense and can really go unchecked for a long time due to automatic payments. The best way to reduce costs is to eliminate these everyday money suckers. Switching to more energy-efficient bulbs, such as LED, will reduce your maintenance costs as well. Set policies that entail all office lights to be turned off when nobody resides within them. Also, consider installing motion lights to further improve on this policy.
Buy in Bulk
Buying in bulk is often a scary thing to do for a small business owner. After all, they cannot risk wasting product if it does not sell. However, there are ways to go around this issue while lowering your monthly costs. First, it’s to research your past inventory and sales. If these are showing steady numbers, then you have a safe number to go with when ordering in bulk.
Another thing you can do is to simply speak with your suppliers. Good suppliers are always willing to work with their clients. Ask if you can purchase in bulk but with a reduction in shipping, ask about specials, or on the sale of a future order. Note that you should first determine if you have the appropriate room to house large amounts of a product before you start ordering.
Maintain Your Equipment
If you are constantly finding yourself bringing in a handyman to repair certain equipment around your business, then maybe it’s time to get to the heart of the problem. Every time that machine stops you are losing money. You have two choices when you run into an issue such as this, either completely repair the machine or replace the whole thing at once. This might sound like something that will increase costs do not decrease it, but when you are continually paying for maintenance, the long-term production of the machine can save you more than having it break down every other day.
Cutting down business costs can sometimes save your company entirely. This is why it is such an important issue that business leaders tend to focus a lot. Although these tips should be taken into consideration, you must also audit the specific issues within your company to determine a proper path to take.
Are you looking for more ways to make your business more efficient? We can help you create a personalized business plan.