One of the most difficult parts about running a business can be managing your finances, making sure you have enough money set aside for unexpected expenses while also getting ahead on your payments. There are a variety of ways you can make the most out of your business and begin to see cost reductions as a result. Here are six.
- Save on electricity rates
- Many entrepreneurs don't realize that they can negotiate their electricity rates. Instead of having a set rate for all your business, you could potentially try to reduce your overhead costs and have discounted rates, and save money on energy usage. There are more tips you can try to save up on electricity like:
- Different contract lengths: Try negotiating different contract lengths with your energy supplier, depending on your needs. For example, if you are not using peak hours during weekdays it might be best to negotiate an 18-24 month contract, while shorter contracts are better for peak-hours use.
- Add Smart Meters: If possible, add smart meters which will help track when peak times are experienced in your office and reduce overspending. As well, adding solar panels to your roof is another way to reduce expenses while providing free energy, so be sure to take advantage of government rebates where possible.
- Lower your cell phone costs
- Do you use a lot of data? If this is the case, look into getting bundled talk and text plans with mobile carriers instead of adding extra devices onto your current plan. If your office doesn't need mobile internet access for staff, maybe only 1-2 employees should have mobile phones or tablets with data plans, rather than having an entire laptop browsing on expensive business internet. To avoid overspending in the long term (and making your business appear less attractive), make sure your business can justify all monthly expenses that are added by negotiating discounts where possible. You can also negotiate rates with your call and data supplier.
- Reduce printing costs
- Printing in color can be expensive when it comes to ink and paper, so if you want to print something in color, make sure it is absolutely necessary. Printing in black and white not only saves money on supplies but also on electricity (they use less energy). Also, try scanning documents into your computer before printing them rather than relying fully on paper files; this is a great way to save space and reduce the risk of losing important papers. If possible, upgrade your printer to one that allows users to scan directly into their computers or mobile devices for added convenience.
- Save on office supplies/operating expenses by using alternatives instead of buying brand-new items
- For example, most printers come with a free ink refill kit, which you can use to save on buying new ink cartridges. Have a look at your office supplies, and try looking for places online that have remanufactured or refilled items for a fraction of the cost. You might even be able to find a source that supplies refurbished equipment as well.
- Save money on business travel
- If your business frequently requires sending employees out into the field (sales representatives, service teams), consider investing in devices like tablets which allow users to work offline when there is no wireless connection available; this will help reduce overall costs associated with roaming fees and data usage while travelling internationally. Also, don't forget to sign up for discounts with hotels or frequent flier programs associated with your preferred airline carrier.
- Re-evaluate the need for extra equipment in your office
- Do you really need that paper shredder or industrial-grade fan? If not, consider exploring alternative options and seek out ways to reduce expenses and save money on unnecessary overhead. If you can rent items instead of buying them, this might be better as well, depending on the item and frequency of use. The one exception is if it's necessary for a business to have industrial-grade equipment that is used frequently; these types of purchases should come after looking at other areas such as renovations first, as they require significant investments which take time to pay off.
Is reducing cost important?
Reducing costs is important to maintain a healthy business and show good leadership. Reducing costs will help lower prices for customers, increase profits, and build a better relationship with your staff. Managing your budget well will help you in the future, so reducing costs is always a great idea.
promote a healthier financial state which can help attract or retain employees. It's important to always minimize spending in the long term while ensuring that the day-to-day operations of your business are able to run smoothly. Good luck with your business!