Cost cutting is vital to ensure the stability and progress of every business in today’s competitive world. Here are ten ways to save your money for small business:
1. Purchasing system:
Buying goods in bulk is always cheaper than in small quantity. You might be buying the same goods from different suppliers or smaller quantity in more frequency. Coordinate the spending of different departments to maximize discounts through bulk purchasing power or increase the quantity by lesser frequency.
2. Lesser paperwork:
There are many times when there are unnecessary uses of papers. Request for monthly consolidated invoices which can help you reduce administration cost and also improve cash flow. With minimizing paperwork like lots of print outs and printing and saving fax in to PDF when actual print is not required can also save stationary cost and environment too.
3. Good relationship:
Building good relationships with suppliers can result in reductions in costs and also serves you manage business efficiently. Solicit them for suggestions on how to improve the way in which both can work together. If ordering weekly instead of daily would let them reduce their own admin costs and enable them to pass the savings on? Reduce your stock levels, and encourage suppliers to hold stock, this would help you improve cash flow.
Don’t just take their word for it: conduct regular research to ensure that your advertising budgets are being used effectively. Remember that outstanding advertising creative work generally costs no more than ordinary creative. Having said that, ensure that you are not funding the creation of campaigns that win awards, but do not sell your product!
5. Bank charges:
Analyze your bank statement monthly or at least once a quarter. Examine how can you minimize the charges and get the best out of it. Ask your bank manager to suggest ways in which you could reduce them. Many banks specialize in different areas of expertise, and you can use that knowledge to serve your needs and save you money.
Understand how your couriers charge their clients. Some charge per consignment, others per parcel. Work out which service will be most effective for you and, if necessary, switch suppliers. Study your courier company’s specialty, when it comes to service? Some specialize in overnight delivery, other in international distribution. Use the courier that is most appropriate for the job, as this will be most cost-effective.
7. Beware of dates:
Be aware of the expiry date on contracts for services such as electricity, gas, and phone. Suppliers often revert to a much higher penalty rate once the contract expires. A thing done on time saves time and money too.
8. Freight costs:
Consider handling costs and packing when putting together a consignment. Work out whether it fills one container, or is it made up of several items that can be packed on pallets so that you can minimize transport handling costs and stock damage. Make use of one which is more cost effective and convenient.
9. Insurance policy:
Allow time to investigate and negotiate your insurance policy before the renewal deadline. Make a note of when policies are due – many brokers wait until so close to the renewal date to contact their clients that they leave little time for negotiation. Work out the latest level of cover you need and examine if it is more or less than last year. Find out how you can get the best deal.
Standard cartons are much more cost-effective than special-sized ones. Review your packaging – invite suppliers to make recommendations for cost reduction. Printed cartons are expensive. Consider using plain ones, and sealing with printed tape instead.