Business owners are always looking for ways to make more profits. The first place to look is the level of costs in your business. Can you justify every cost in your business? Are you running your business as efficiently as possible? With that in mind, here are several ways to cut costs in your business.
Eliminate Wasteful Employee Actions
Make sure all of your employees are necessary. Look at the job function of each employee and make rational decisions on how they spend their time at work. Evaluate job functions and reorganize if necessary.
Eliminate Your Most Wasteful Customers
Some customers seem to take more time to deal with than others for a variety of reasons. Evaluate each customer, taking into consideration how much revenue they create in contrast to how much time it takes to service their account. Cut customers that don’t add enough value to your bottom line. You’ll be better served by devoting your time to adding more profitable, less time-consuming customers.
Seek Out Interns
Bring in interns instead of hiring more employees to fill in duties during peak times. Taking on interns to do tasks that your more valuable employees are already doing is just good business. Things that are mundane, trivial, and time-consuming are just a waste of your more valuable, profit-producing employees’ time.
Look for Less Costly Insurance
It doesn’t make sense to spend more than you have to on insurance. If you shop around, you’ll likely find less costly insurance that offers the same or even better coverage, for less than you are paying now. You may have signed up for that insurance when you first opened for business, but be aware that insurance coverages and costs are constantly changing. You can talk to your current agent and tell them that you need to find a better rate that serves your needs better.
Use Temporary Help When Possible
Like interns, it serves your business best to only pay the help you need, when you need it. Temporary agencies can serve you well by pre-screening possible qualified candidates that will only be there when you need them. Remember that it is very expensive to put a new employee on the payroll and even more expensive to keep them there when they’re not creating value for your business.
Pay All Your Bills On Time if Possible
Although the little extra you pay in late fees may not seem like much at the time, it can add up to a significant amount over time. Also, late fees can adversely reflect on your credit rating, limiting your potential borrowing power at a time you really need it to take advantage of an opportunity.
Remember, running a business successfully does not need to be complicated. Keep it simple!
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Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at firstname.lastname@example.org.