How Small Businesses Can Reduce Their Operating Costs
You can enhance your profit margins through two methods – by boosting your income or by reducing your expenses.
No small business wants to be overspending. However, when cutting down on costs, it is important not to skimp on the quality of your service to customers. While opting for the cheapest suppliers and cutting down on any subscriptions will leave more cash in the bank at the end of the month, it could have a negative impact on your service offering.
In order to sensibly reduce your operating costs, you will need to create a budget based on your average income per month (taking into account seasonal fluctuations), the needs of your business model, and the expectations of your customers. That final point will make sure you are not reducing the quality of your service to unforgiveable levels.
One key tip when budgeting is to overestimate spending and underestimate income. This will give enough leeway to ensure your operational expenses are covered each month.
Minimizing spend on utilities
If you own or are leasing business premises, utilities are something you cannot escape. Worse, a lack of regulations to protect small businesses against shoddy deals makes it easy to unwittingly fall into expensive contracts. For these reasons, spending on utilities should be the principal area to look at when looking to reduce your business costs.
There are two key ways to reduce spending on core utilities; first, you can look at limiting usage to cut down on your spending; second, you could switch to cheaper suppliers to pay less for your current usage. Visit the Utility Bidder website to compare tariffs to get the best deal for your small business.
Waste & Recycling
Depending on the service that your small business is using for waste removal, there are several ways to reduce spen.
If your small business is using a per bag service whereby you pay for each bin bag collected by your provider, then reducing the amount of rubbish you are creating will cut costs. You can do so by increasing your recycling habits, avoiding single use paper, card, and plastics (such as cups, cutlery, and paper towels), and encouraging a paperless environment. If you are not filling up your bins each week, then contact your supplier to see if you can reduce the frequency of your bin collection. If your bins are only half full each time they’re collected, reducing collection frequency could half your bills.
Cutting down on office space
If the coronavirus pandemic has taught us anything, it is that many small businesses are capable of being a lot more flexible in terms of their office space. With that in mind, if your small business is able to have remote workers and you are willing to allow employees to work from home, then telecommuting could help you to save on operational costs by reducing the need for space using a hot desking approach.
A move towards a paperless office could save money by reducing the need for storage space and allowing you to downsize.
