There are three ways that you can increase your bottom line. You can either increase sales profits by increasing your margins or total sales, reduce your overheads, or do both. While increasing sales profits is often easier said than done, virtually any business can find ways to reduce their everyday expenses. It’s all a matter of knowing how and where to start. In this article, we’re going to give you a few simple ways to reduce your business’s operating costs.
Professional Memberships and Marketing
Depending on your business, you may be required to pay professional membership or association fees. These fees may range from modest fees to outrageous ones. Do plan for the cost of continuing education and the certifications necessary to remain competitive in your business, but don’t join every association in the hope that it will generate new business.
Focus on those certifications and memberships that are a selling point with your customers, such as when a database of professionals is their go-to point for searching for a business like yours. Consider it part of your marketing budget. To save on marketing costs, focus on strategies with the highest return on investment. This may require trial and error, but you can learn from what works for your competitors.
Vehicles and Transportation Costs
Don’t buy a vehicle for your business just because you’re a startup and think you might need one in the future. While the cost of the vehicle can be claimed as a business expense, it may not be the most economical choice. You may do better reimbursing people for personal vehicle mileage. Buying a vehicle may also push you to drive it more to justify owning it. You can also think outside the box; try to arrange video conference calls instead of making every meeting in-person, for instance.
Wages and Benefits
Before you hire anyone, have a clear understanding of the responsibilities they will handle and the benefit they will bring to the organisation. Do your research regarding pay rates so you don’t pay more than the going rate. Don’t forget to factor in the cost of benefits. Consider if bringing in independent contractors or part-time help instead of hiring full-time employees would be better for your needs.
Another thing that you can do is work with a commercial HR consulting team. What separates commercial HR services from traditional services is that commercial HR focuses on the business function of HR first and foremost. It’s all fine and good to be able to find candidates to fill positions, but they also have to be hired in a way that will allow you to reach your business goals.
A commercial HR consultant will help you to get the most out of the employees you hire. This will allow to save on hours paid, and also help you streamline your HR function to make it more efficient. HR often relies too much on factors like turnover rate or training, but commercial HR focuses on what actually matters the most: profitability, productivity, and increasing your margins.
As you can see, there are tons of ways that you can cut costs if you’re creative and know where to look. Make sure that you apply these few tips, and always try to find ways to make your business more cost efficient without sacrificing service, safety, or quality.