If you’ve spent any time in business, you’ll know that costs soon mount up. It’s a constant battle to keep them down, as suppliers and contractors claw away at your money. At the end of the month, you may see upwards of 95% of your revenue disappear in costs.
For many business owners, that’s not acceptable. They want to get costs down and increase the amount of cash they have on hand at the end of the month. The question is where to start. Here are some tips for cutting down on your business costs without destroying your business.
Cut Energy Use
For some businesses energy is a significant cost. They’re the companies with production lines or perhaps even blast furnaces. Businesses that work out of offices tend to have lower energy bills. But thanks to computers and other appliances, the bills soon mount.
So what can businesses do? The first thing that you can quickly change to is LED lighting. LED lighting will offer several benefits to your business over the long run. Unlike traditional light bulbs, they aren’t going to blow after a year of use. Some LED bulb manufacturers say that they’ll last more than a decade.
But you can also cut energy usage if you have an office by choosing the right computers. You can now get some computers with very low power requirements – on the order of about 15 watts. These aren’t high-performance machines, but they will be able to cope with most office tasks.
Phone bills are a significant expense for the majority of businesses. You are always on the phone to clients and managing employees. But curiously, this is another place where you could be reducing costs.
No, you don’t have to lessen the number of calls you make, although you could using cloud software. You simply have to perform a telecom audit. And it’s a lot less scary than it sounds.
Telecom audit companies know that phone bills can be hard to understand. This is particularly the case for complex business invoices. And from experience, they also know that about 80% of bills contain errors.
That’s where having an audit starts to make sense. The auditors will find out whether you have been overcharged. If you have been overcharged, you’ll get some of that money back, minus commission to the auditors.
Pay Invoices Fast
Some invoices offer incentives for early payment. Often these can be as high as 4% of the total bill. Get them paid and take advantage of any early payment savings to improve your cash position in the long run.
Be Clever With Space
Many startup firms will pay over the odds for office space. Often they’ll rent premium space, just to archive. Don’t fall into this trap. Rent only a small amount of space to do your day to day business. And then rent cheaper space out of town for all your archiving and filing.
Lastly, when you do rent space, make sure that you negotiate at the renewal stage. Let the landlord know that you’ve been eyeing new premises with cheaper rent and a more convenient location.