Running a small business is a constant balancing act. You may not have the same overhead as major corporations, but you also don’t have the massive budgets that allow them to operate from month to month without having to worry about whether or not they can pay their lease, their employees, and all of their other costs. In short, you need to plan carefully in order to make sure that you don’t overextend yourself. But since you can’t always count on your business to earn enough to cover costs, and your expenses can vary from one month to the next, you might be on the lookout for other ways you can hedge your bets. Trimming costs whenever possible is one good way to address your issue, and here are just a few tips to help you along the way.
Your knee-jerk reaction may be to move to a less expensive location or cut your headcount, but if your location is bringing in new business and you have enough work to necessitate your current level of staff, such decisions could end up being major mistakes for your business. Luckily, there are other ways you can cut your costs that won’t be so detrimental to your operations. For one thing, you might consider paid internships as a way to supplement your staff rather than hiring on full-time employees to attend to simple tasks like filing, data entry, and so on. This could help to reduce expenses while maximizing efficiency, and hence, profitability.
But aside from optimizing your staff, you might consider all kinds of small cuts that could add up to major savings. You can start by negotiating with vendors. If you think that your current supply chain is costing too much (or you simply can’t afford it), give your vendors a chance to keep your business by seeing if you can get some kind of discount. You might be surprised what you’ll get just by asking. Of course, it couldn’t hurt to have a little leverage on your side, so before you talk to your suppliers try visiting competitors to see what they’re willing to offer.
You might also try minimizing costs when you make purchases in a couple of different ways. For one thing, you could buy some items in bulk as a way to reduce the per-item expense. You just need to make sure that you’re actually going to use everything you purchase before it expires (pens, for example, could dry up before you use them). Another option is to collaborate with other small businesses in your area to make bulk purchases of items (like office supplies) that all of you can use, minimizing costs while still obtaining just the amount you actually need in the foreseeable future.
And of course, you could stop buying some items altogether. If you decide that you want to reduce consumption for the purposes of environmentalism, you’ll be happy to know you could also save some money by going paperless and cutting down on energy and water usage. And under the heading of conservation, you should also try to avoid unnecessary payments linked to your bank loans, credit cards, and your business checking account. As a small business owner you can’t afford to pay fees and other additional expenses that come with late payments or overdrafts.
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