Ready to turn your business into a lean, mean fighting machine? No matter how efficient an operation you run, there’s always scope to cut the costs incurred in running your business. When looking for ways to increase profits, many entrepreneurs fall into the trap of focusing their energies on increasing revenue. While this is always a sound move, don’t neglect to look at it both ways. You can also increase profits by closely examining your business outgoings. This is why we’ve decided to put together several cost-cutting tips for small business.
From utilities, to rent and improved software, there are several ways a savvy business can trim the fat without sacrificing service levels. To help achieve your goals, here are some of our top cost-cutting tips for small business.
Lower Your Rent
Commercial real estate in British Columbia can be expensive. Ask yourself – do you really need all the space you’re paying for? There are several imaginative ways you can bring down the cost of your rent that doesn’t involve asking the landlord for a reduction. For starters, consider empowering non-customer facing staff to work remotely. This can cut down on the desk space you need. Paying for a warehouse to store your goods? Drop shipping offers a cheaper and reliable method of distributing your goods to customers that dramatically reduces the amount of space you need for storage.
Identify Inefficiencies
From humble beginnings, Amazon has grown to become the world’s largest online retailer. One of the most effective ways they achieved this was by identifying inefficiencies and creating new and improved processes to fix them. Take their shipping for example. Amazon saw the postal system as the biggest obstacle to delivering their products on time. Their solution? They created their own logistics network and turned it into a money spinner. While you aren’t expected to create your own Amazon Prime, there are still countless inefficiencies within most businesses that can be refined. Take a holistic view of your operations and find areas you can become more lean.
Look at Your Marketing Spend
Marketing, if done effectively, pays for itself multiple times over. Unfortunately, many small businesses miss the mark with their spend. What’s the return on investment for your marketing? Is it quantifiable? If not, stop spending the money. Marketing is a results-based business. And, if you aren’t seeing the results, you’re wasting money. Target measurable marketing areas like pay-per-click and boosted advertising on social. Look at your results and refine until you find a mix that’s economical and provides results.
Look at Your Own Role
Entrepreneurs are often indispensable to their businesses. This is a problem and can prevent productivity and progress. Simply put, if you’re in the trenches tending to day-to-day admin, how can you look at the big picture? Begin by empowering staff members to take on tasks you perform. Don’t fall into the trap of hoarding your business knowledge in your head. Once you’ve delegated the small stuff, you are liberated to take on projects that will grow your business.
Are You Optimizing Tax Benefits?
In Canada, entrepreneurs can avail of several CRA-approved tax deductions. Covering everything from business mileage to your mortgage, there’s lots to claim depending on your industry. We’ve put together a handy guide to most small business tax considerations, which you can read here.