7 Big Ideas to Save Your Business Money
Source: http://businessblog.winweb.com/big-ideas/7-big-ideas-to-save-your-business-money
1. Drill down into the facts and figures
If you want to identify ways to save your business money, it is going to take a lot more than just a summary. You need detailed financial records so that you or a financial advisor can see where your business is wasting money or being inefficient.
2. Understand how your business operates
You should be able to report on various business metrics that have an impact on your ability to operate. Do you know how many units you have sold in the past week or how much overtime was needed to complete the last big order? These are all things that you should be able to produce if asked.
3. Price according to your marketing
If you are aiming your products at the high-end market then you should be charging a premium. There is no point branding your products as something luxurious and special then selling your product cheaply or trying to undercut your competition. Work out the cost of your product, then add a profit margin based on your marketing image.
4. Be frugal with your purchases
Make it so you and your staff have to justify every purchase they make. Do you really need a new printer and a scanner for your office when you could buy a machine that will do both? This applies to software too. Shopping around to find the best deals from each vendor will still end up costing more than an all-in-one solution from one provider.
5. Conserve your capital
Although interest rates are still currently very low, it is still wise to build a decent reserve of savings for your business so that it is able to weather at least three (or possibly even six) months of financial uncertainty and still be trading at the end of that period.
6. Pay bills immediately
Avoid being charged extra than is necessary. Many of your suppliers will offer early payment discounts for prompt receipt of funds, sometimes knocking nearly a quarter of the cost off the bill. The longer you leave it to pay suppliers then the more your costs will begin to mount.
7. Lease, don’t buy
It is often far too expensive to outright purchase a product or service. You should lease expensive items like the machinery you need to create your products and the same principle applies to software too. Getting your software on a subscription basis removes the need for a large initial outlay and ensures that it is always kept current.
