Small business owners and entrepreneurs are always seeking opportunities to save on operational costs and increase income; sometimes these two things don’t go hand in hand.
Reasonable Costs While Making a Profit
Maintaining services at reasonable costs while making a profit can be a balancing act.
When I work with entrepreneurs and intrapreneurs like you, I always look for cost effective methods to reach a goal and I always steer clear from affecting the quality of core services that maintain the business running.
When businesses approach the slow season they immediately start looking at cutting costs and start eliminating without really measuring the impact it will have in overall service.
10 Tips to Cut Costs
So the next time you approach the slow season and need to cut costs here are a few things you can focus on:
Collections – As a small business I use to spend a large amount of time working on the collections of my business. If you have a lot of money that is owed to your business this can be costly. Focus on collecting that money and making sure your clients understand that by paying on time you can serve them better.
Look at your Banking Fees – When I sit with many small business owners I am amazed at how many pay banking fees they should not be paying. I personally got hit by my bank Doral when they decided to add a $15 transaction fee for each wire transfer I received. That made me readjust how I was getting paid from a few clients and helped me save a significant amount of money on banking fees.
Sign Up your Business for Rewards programs – The same way you can sign up as an individual for rewards you can do the same with a business. A good example is that some airlines provide extra points and discounts if you have a business rewards account with them. Look into every provider you have and see if they have any rewards systems for your business.
Cancel any Services You’re No Longer Using – I am a fan of trying new software and some of it is pay as you go. I remember I kept some CRM software which I never used on contract for about 16 months. I finally cancelled it when I forgot to change my new credit card number and the service was disconnected. Disconnecting sooner could have saved me more than $350 dollars. Look into what services or software you no longer need and disconnect them. You can always connect them back if you need to in the future.
Gift Your Services vs a Real Gift – During low season it might be a good opportunity to do some community work, show your best customers you appreciate them, or help a charity with some of your work. Occassionaly, donating highly specialized services to a Non-For profit can be even tax deductible. So while your not making any income because it is the low season you will be helping out and possibly reducing your tax debt.
Rent Out Unused Space – Sometimes we have more space than what we need. Depending on what type of business you run and there are many ways to take advantage of unused space. From renting it out for storage to even placing items by creating a partnership with someone else and getting a commision or rent of what is sold.
Surge Protectors – I live in a place where power surges and spikes happen often. Not only do I keep my personal items I mainly keep my business technological assets on surge protectors. –
Buy In Bulk with Other Businesses – On occasions you buy certain items at a premium because it might not be worth buying it in bulk. Get a few more business owners to buy in bulk with you. It becomes cost effective and you might even be able to negotiate a better deal for everyone in the future.
Disconnect Electronics – By disconnecting electronics you end up saving on the electricity that is still used by a device being connected.
Renegotiate on Service Plans – If you have a high cell phone bill call the company and let them know you need a better deal. Same thing with other service providers; if the services can be easily requested to another provider, why pay premium rates? Just make sure the new provider offers better or the same services than the previous one.
Next time you start thinking of cutting costs like payroll hours, think about how it might impact the quality of your operations and those who depend from it.
Think of these 10 things that can be done to keep your business going during the slow season and make busy season more profitable.