In business, you have to spend money to earn money. Whether your small business is a service-based business, a retail sales business, or a product manufacturing business, there are always expenses which you must incur in order to continue making revenue.
However, costs and expenses can get out of control and escalate to the point where your small business cash flow is stifled or even negative. So what can you do to help make a better profit margin and keep more of the money you earn? By cutting costs!
Sometimes cutting costs is easy, and sometimes it hurts. However, it must be done if your business depends on it. Here are three tips you can use to cut costs overnight and start seeing better cash flow:
Overhead Cost Reduction
Review your overhead costs for opportunities to save money. Electricity and utilities are often easy to reduce, especially once you see just how much you are paying for them.
Form a strategy to reduce costs immediately. Install movement sensors for overhead lights so they are always off when not in use. Buy supplies like pens and paper in bulk. You might even lock the supply cabinet so only one person can issue supplies and only when needed. You could talk to your landlord about reducing your rent. A property owner may be open to receiving lower rent rather than no rent should you have to move.
Materials Cost Reduction Tip
If you purchase materials for your business, you can certainly find ways to reduce costs. Consider buying materials locally or closer to your business to eliminate shipping costs. Again, buying in bulk ultimately saves money, so try buying larger quantities at one time. Shop around for suppliers to offer a better price on the materials you need, or consider an alternate, cheaper material altogether.
Labour and Salaries Cost Reduction Tip
Much of your expenses are in the form or salaries and labour. How can you reduce these costs overnight? The obvious answer is to cut jobs, but shedding workers is never a winning situation for you or your employees.
Rather, cross train employees so they can do more than one job. If there is no work available for a machinist in your order pipeline, perhaps he could do office work like filing or data entry. Perhaps a bartender in your restaurant could learn to cook short orders to help in the kitchen and reduce the total number of staff at one time.
There are plenty of areas in which you can immediately begin reducing costs. Expenses in overhead, labour, and direct materials can be reduced if you look closely at what you are spending and think creatively. Ultimately, you want to keep jobs and improve your net revenue, and reducing your unnecessary spending habits is the first way to get on the road to sufficient cash flow.
However, costs and expenses can get out of control and escalate to the point where your small business cash flow is stifled or even negative. So what can you do to help make a better profit margin and keep more of the money you earn? By cutting costs!
Sometimes cutting costs is easy, and sometimes it hurts. However, it must be done if your business depends on it. Here are three tips you can use to cut costs overnight and start seeing better cash flow:
Review your overhead costs for opportunities to save money. Electricity and utilities are often easy to reduce, especially once you see just how much you are paying for them.
Form a strategy to reduce costs immediately. Install movement sensors for overhead lights so they are always off when not in use. Buy supplies like pens and paper in bulk. You might even lock the supply cabinet so only one person can issue supplies and only when needed. You could talk to your landlord about reducing your rent. A property owner may be open to receiving lower rent rather than no rent should you have to move.
Materials Cost Reduction Tip
If you purchase materials for your business, you can certainly find ways to reduce costs. Consider buying materials locally or closer to your business to eliminate shipping costs. Again, buying in bulk ultimately saves money, so try buying larger quantities at one time. Shop around for suppliers to offer a better price on the materials you need, or consider an alternate, cheaper material altogether.
Much of your expenses are in the form or salaries and labour. How can you reduce these costs overnight? The obvious answer is to cut jobs, but shedding workers is never a winning situation for you or your employees.
Rather, cross train employees so they can do more than one job. If there is no work available for a machinist in your order pipeline, perhaps he could do office work like filing or data entry. Perhaps a bartender in your restaurant could learn to cook short orders to help in the kitchen and reduce the total number of staff at one time.
There are plenty of areas in which you can immediately begin reducing costs. Expenses in overhead, labour, and direct materials can be reduced if you look closely at what you are spending and think creatively. Ultimately, you want to keep jobs and improve your net revenue, and reducing your unnecessary spending habits is the first way to get on the road to sufficient cash flow.
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