The challenges facing modern businesses, especially in recent months, have been well documented. It can sometimes be difficult to trim costs further than you already have, but there are still opportunities to move those numbers the right direction.
Here are some relatively simple, actionable steps you can take to widen those margins.
Shop around for utilities
Utilities and associated costs are part of the price of doing business. Between internet, electricity, heating and other standing orders it can be easy to lose track of how much you're spending.
It's also all too easy too stay with the supplier even if cheaper options are available. Don't be put off by the imagined toil of finding a new vendor. Instead do the research incrementally: Maybe examine energy providers one month and internet the following. Or use an app that automates this kind of research such as Reducer, which analyses bills for potential savings..
Keep an eye on when contracts expire, and talk to the providers before it does. At contract time have a conversation with your provider to see if they can do better. This is an opportunity to change vendors if you discover a cheaper option.
Usage should also be taken into account: if you’re using a lot less mobile data, for instance, than you’re paying for, you might be eligible for a cheaper plan.
Keep an Eye on Bank Costs
Bank fees can be small initially but incremental costs can creep up and add up. He might use your bank for overdrafts or loans. But are you sure their interest rates are the most favorable? Are there new or hidden costs you haven’t taken into account. Shop around and ask your peers what their choices are.
Changing banks is not as onerous as you think.
Don’t get complacent about client payments
Obviously you want a good relationship with your clients but it can be tricky to get the balance right between being accommodated to them and inflicting unknown financial penalties onto your own business.
If you’re waiting three months for a client to pay you, that's a three month interest free loan you’ve given. And that's finance could be in your treasury or generating money that you don't have.
Some vendors also offer incentives for paying early, which you can benefit from as a buyer or vendor.
Consider leasing equipment
Depending on the kind of business you run, you might need to buy or rent equipment. This equipment might generate money. Examples of these would be a coffee machine, vehicle or a vending machine. Or it might be something that makes your office, factory or shop floor more efficient.
Leasing equipment allows you to reap the financial benefits of the equipment without incurring the cost of a purchase or loan. It also allows you some agility so you can decide further down the line whether or not it's worthwhile leasing, buying or doing without this piece of machinery.
If you do decide to buy, of course, consider quality used equipment. There’s an old adage of a new car losing a third of its value as soon as you leave the dealership. That’s still true.
Ask for discounts if buying in bulk
When dealing with suppliers, there might be bulk discounts, also known as ‘quantity discounts’ available. And these reductions are sometimes only available if you ask.
As a customer you are the one in a position of power. And if you have a good enough relationship and you feel comfortable asking for quantity or bulk discounts, it's worth exploring.
Swap paper for electronic wherever possible
The days of hoarding boxes of paperwork are over for many companies, and should be for yours too. Your receipts, bank statements and invoices should be cloud based. And you should be automating the processing of these documents too, whether you manage your own books or you have an accountant or bookkeeper. Hoarding paper takes up space, and space costs money.
Time is money too, and if you’re spending hours on data entry, that’s time you could be doing something else (possibly something you enjoy!). You can find out more about the benefits of automation for SMEs on our own site.
Examine the possibilities of remote working
Remote working has become a hot topic in the past year. And many organizations, big and small, are examining whether or not it’s viable long term.
It's completely understandable that some employers are reluctant to embrace it - there are legitimate concerns about productivity, practicalities of setting people up at home and about teamwork. However, recent times have shown that productivity generally doesn't suffer when employees work from home.
If office work is allowed, and you miss the creativity, ideas and camaraderie of an office, you can still rent a space for less than a full week. Or you can rent meeting rooms when the need arises (again, assuming they’re not in lockdown).
A remote workforce slashes expenses like rent, utility bills and other incidental costs like snacks and in some cases even furniture.
A good place to start is a survey of your staff to find out how they feel about remote working. The consensus and several surveys is that employees seem to want a hybrid of home and office work. So even when officers are permitted to open again fully you might have the option to allow a semi-remote workforce.
Monitor your energy usage
Some energy companies monitor how much energy you're using and when it's being used, but most give a bill based on an estimate.
However if you have several premises, it is definitely worth investigating how much energy you're using and paying for. For instance keeping lights on in an office over weekends or overnight in that factory can really add up.
With knowledge comes power (pun intended), so knowing where you’re wasting energy also means good habits. This could be powering down machines after hours (not just putting them on standby!) or investing in automated lights that power down at certain times. Indeed, monitoring energy use should encourage good habits.
AutoEntry - making life easier
AutoEntry helps businesses across the world with their data entry and cost savings. Slash labour costs by automating your data entry, make life easier by moving receipts, bank statements and invoices to digital. Find out about these benefits and more with a free trial.