If you run a small business, you already know that there is more than one way to put your budget at ease. You can increase earnings, but it’s sometimes much easier to cut costs. This list of often-overlooked opportunities will allow even the nimblest of businesses to squeeze some extra from the bottom line. Try one – or all — and see real savings right away.
1. Go Virtual
Despite projections that global business travel will grow to $1.6 trillion by 2020, small businesses struggle to justify spending on flight, hotel, and meal per diem – when much of the work can be done via Skype or another professional web conferencing tool. Determining whether an “in person” meeting has an appropriate ROI is key; more business can (and should) be done virtually when it makes money sense – especially since as much as 50% of meetings have been determined to be a complete waste of time.
2. Nix Long Lunch Breaks
If you’ve been having issues with tardy employees who just seem to linger a bit too long over the noon meal, consider ways that you encourage in-office eating. There’s no need for them to fight traffic or deal with poor restaurant service when all they need is waiting in the break room. Consider low-cost, healthy catering a few times a month (or even once a week), where employees can pitch in for the bill. Keeping workers on campus for even an additional 15 productive minutes a week can add up, and the morale-boosting benefits of eating with co-workers are valuable beyond measure.
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3. Ditch the Paper
With more and more business services moving entirely to the cloud, it’s not necessary (or desirable) to print out communications, presentations, or even office memos. Gartner reports that paper usage increases 25% year over year during the of a business, but what if you could digitize most everything you create? Not only will this cut the cost of paper, toner, and printer rentals/maintenance, but other hard costs (staples, paperclips, file folders, highlighters, etc.) will dramatically drop when paper is phased out.
4. Embrace Telecommuting
The old fear that employees working from home won’t be as productive has been widely debunked, and yet this is still one of the largest opportunities for businesses to cut costs. Not only will you save on the overhead of providing office space, bathroom supplies, and breakroom goodies for these workers, but you may also be able to negotiate a lower salary for those who appreciate the flexibility of working from home. Employees may be more than happy to trade money saved on the morning commute for a slightly less hourly (and taxable) wage.
5. Rent When It Makes Sense
Many small business owners make the mistake of thinking they must buy all their business assets outright in the beginning. But if you plan on experiencing rapid growth in the next five years, it may be best to have a more flexible (and affordable) plan in renting office space, equipment, and even the plants you put in your lobby. Since renting also comes with the reassurance of maintenance plan, you can save some serious cash if anything goes wrong.
6. Contract Out
A solid employee base is a part of what makes a corporate culture last the generations, but that doesn’t mean there isn’t a place for independent contractors in your business. In fact, this flexible service provides can provide highly-specialized support to your existing teams, without the need to commit to long-term employment contracts or expensive benefits packages. And with new studies showing that even the smallest companies can benefit from gig workers, there’s no reason to hold back from tapping into this skilled segment of the workforce.
7. Choose Your Credit Wisely
Not all business credit cards are created equal, and there are bigger and better offers popping up all the time. Savvy business owners should check their business credit score regularly, and ensure that they are paying fair rates for credit utilization, being prepared to refinance, as needed. It’s also a prime time to check out new travel rewards cards or other accounts that give you back something valuable for your business; pick the card that appreciates your spending goals and pays you back on everyday expenses.
8. Ask Employees What They Want
Management can be funny about keeping their “pet projects” – even to the point of spending money on stuff that doesn’t matter. Annual employee events or costly team-building traditions may not be necessary in a time of budget-tightening, and workers may not even miss them. Take time each year to get feedback from your team on the types of rewards they value most; their answers may be far more affordable than what you’re currently offering.
9. Lock it Up
We wish it weren’t so. Even with your best intentions to hire only the best and the brightest, people steal, and loss prevention is a valid use of your time and energy. If your employees don’t bother with the supply closet, off-site contractors or service professionals might. It’s best to keep the temptation to take home sugar packets and staples at zero by storing your supplies out of reach of anyone but janitorial and the office management teams.
10. Comparison Shop Online
While it’s popular for companies to have a contract with suppliers and lock in pricing for a year or more, it can benefit the smaller business to be free to shop online for the lowest price at any time. Train your purchasing team well, and give them permission to browse the big supply sites – as well as retailers like Amazon.com – to get the rock bottom price on those items you use most.
11. Account for Time
Employees don’t like to be told how to use their computer time, and most companies have firewalls to protect against viruses or harmful malware. Beyond that, however, it’s wise to let your workers use their own discretion on how long is too long to spend browsing the web. Tools that track time spent on each site (without revealing personal tracking info) are valuable in giving feedback and offering insight into the time sucks that most workers aren’t even aware of. Managers can use these personalized reports to then discuss how productivity can be improved through wiser and more accountable browsing habits.
12. Structure in Breaks
Keep employees from sneaking in 5 minutes here and 10 minutes there throughout the day by scheduling in frequent, sanctioned breaks that keep them feeling like part of a productive team while also allowing some healthy downtime. Whether you pay for the breaks is up to you; simply communicating that you expect them to take a brisk walk around the office or grab a coffee can help. Lead by example and watch the productivity between breaks increase.
13. Audit Tools and Subscriptions Regularly
Software tools, magazine subscriptions, organizational dues, and monthly service charges can eat away at an already-strained small business budget. Get a handle on runaway (and unnecessary) costs by auditing these expenses at least quarterly. What might have been a must-have tool may be outdated by end of year. Be ready to axe any fee or charge that doesn’t fit your goals or feels like an obligation with diminishing returns.
14. Share Numbers with Your Team
Employees make hundreds of decisions in their daily work lives that can cost or save the company money. These are often done without the oversight of a manager, and added up over time, can be the difference between a bust or boon. Share the company financial goals regularly with your workers, emphasizing their role in creating stability and growth, and tying it back to how it affects them personally. Remind them of the benefits that exist when the business is doing well, whether that be in the form of a bonus or more job security in the coming year.
Many businesses are already doing some form of many of these tactics, but not at a consistent rate. Remember that best practices take practice – they are never a one-and-done option for continued success. When is the last time you looked at your day-to-day spending and saving habits and how they can be improved from the members of your front-line? Start today to get a handle on a better financial statement at the end of this fiscal year.
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