To make more money from your business, you don’t necessarily have to obsess over bringing in more clients. While steady growth in your customer base is vital to succeed in any entrepreneurial venture, one can also widen profit margins by reducing the costs of doing business. Here are five tips on how to trim the fat and streamline cash flow for business owners and entrepreneurs:
Outsource the Workload
Delegate the menial, repetitive tasks to freelancers and contractors. A lot of people mistakenly believe that outsourcing is only reserved for the billion-dollar companies. However, there are a lot of tasks that a business has to deal with that can be outsourced elsewhere instead of having to pay salaries and benefits to full-time employees. For instance, consider the costs of building and maintaining a website for your business. Platforms, like Freelancer and Upwork, can help you connect with competent contractors who charge a fraction of what you’d normally pay for an employee, not to mention the hiring process is faster and more straightforward.
Regularly Negotiate Your Prices With Suppliers
Businesses depend on other businesses for raw materials, supplies, equipment, and consultation services. Similar to how customers are always trying to get discounts from you, you should be looking to get discounts from your suppliers. A lot of suppliers are open to the idea of negotiating rates. They are smart enough to know that the economic landscape is ever-changing, and with it the right prices for their products/services. Inability to adapt to these changes can run suppliers out of business hence their willingness to negotiate with business clients. Aside from negotiating with current suppliers, shop for lower rates from other suppliers, which you can use as leverage.
Purchase, Don’t Rent
Leasing equipment can make it a perpetual expense for your business. Rather than renting stuff that your business needs for the long term, like delivery vehicles, printers, or manufacturing tools, pay for it at full price. This reduces expenses over time, plus it gives you the option to resell the equipment later on to recoup the initial costs you paid upfront. Some perpetual expenses, however, are unavoidable, such as office lease and utilities. Leave them be and focus on those that you can actually cross off your list of monthly or quarterly payables.
Revisit Your Telephone Service Contract
Legacy business systems are familiar and, therefore, more comfortable. The trade-off, however, is that they are expensive and, quite frankly, outdated. Not only is it costly, but the wiring and hardware components take up unnecessary space in your workplace. VOIP and cloud-based phone systems, on the other hand, enable data to be flawlessly transmitted as packets over servers, similar to how digital multimedia files are transmitted. Good hosting companies, albeit, can be difficult to track down. A good provider and telephony system package should have an intuitive mobile app for seamless tablet and smartphone integration, more affordable cost charges, and round-the-clock site support for immediately resolving any technical issues you encounter.
Keep Employee Turnover Rate Low
It’s costly to rehire and retrain employees every time someone resigns. It’s in your best interest to keep your employees happy and satisfied with a competitive wage rate and benefits package and streamlined communications. Giving your workforce a platform in which they can communicate through different mediums, such as email and instant messaging, can foster effective data transmission and project collaboration within the workplace while also simultaneously cutting down costs.
There’s always a cost to doing business, but it doesn’t have to cost more than what it should. Use these tips to cut back on business expenses without impacting your day-to-day operations and, more importantly, long-term growth. By reducing business expenses down to the bare minimum, you give yourself more financial runway to explore and entertain other possibilities and opportunities for your business, such as new product lines, new business locations, and so forth.