7 Sure Ways To Cut Your Small Business Expenses And Increase Your Profit
Uncontrollable business expenses is the number one reason small businesses fold up within their first few years of operation. When more money is leaving an organization than is coming in, it’s only a matter of time before the doors are shut for good.
As businesses strive to turn a profit, only a modest few truly do due diligence to track their expenses. Most new startups have no idea of what a “positive cash flow” or a “negative cash flow” means. And because of this ignorance, many run out of operating capital quickly, and begin to lobby potential investors for funding.
How then should small businesses cut-down on their expenses? What areas should small businesses pay attention to, when trying to reduce their expenses?
Here are 7 sure ways to cut your small business expenses and increase your profit:
1). Hire Freelancers:
When paying too many staffs becomes a burden, cutting down on your workforce and hiring freelancers to carryout some of your operations becomes a smarter way to get the job done.
Freelancers may charge higher than you may pay a staff that carries out that responsibility, but considering the number of staffs you’d pay monthly for that, and the periodic intervals the freelancer would work for your business, it becomes a better course of action.
Using freelancers to carry out some important tasks is a great way to cut-down on your small business expenses.
2). Hire Interns:
Hiring interns could be an effective way to get some work done at a low cost. Interns working in organizations are usually there for the experience, and to learn. This motive doesn’t warrant a high salary for the supposed intern, and therefore makes hiring them a good decision for firms trying to reduce their business expenses.
See Also: The Top 10 Reasons Small Businesses Fail
3). Negotiate Lower Prices With Your Suppliers:
If you’re loyal to your suppliers, and they to you, you could talk to them about offering your small business a better deal than they currently do.
Explain the situation you’re in, and how you need to make a little more profit to stay afloat. Suppliers who truly care about their customers would give it a thought. If they’ve offered you their best already, they’d let you know. If they can do better, they’d also let you know.
4). Purchase In Bulk:
Instead of buying small quantities periodically, it would do your business a lot of good to purchase a lot in bulk.
The individual cost of items bought in large quantities are usually lower than the retail costs. This one-off large purchase would not only help your organization save costs, but would ensure you don’t just go on wasteful expenditures for similar different-looking items.
5) Closely Track Your Inventory:
Watch how inventory comes into your business and sells out. By closely monitoring every single sale, you can be darn sure of your numbers.
If you have difficulty in accurately tracking your inventories, consider using an inventory management software to make the job a lot easier. This will ensure you know what’s always available, what should be in the bank, and how to accurately track if little (or a lot of) cash is getting missing.
6). Automate Most Of Your Processes:
Automating your accounting for instance, can save you the cost of hiring multiple accountants. Using a solution like QuickBooks, can ensure your total business transactions are properly accounted for. It also ensures that you only need to hire just one accountant that can manage the quickbooks (or a similar solution) account.
If your expenses are higher than you expect, you can try to save cost by automating as much as you can in your organization; with a person each, to monitor each automated activity.
7). Try Newer Advertisement Channels:
Rather than spending a lot of your cash on billboard ads, radio ads, TV ads, internet ads, and a lot more, streamlining your ad channels to the most effective channels where you’d certainly reach your target audience would be the best approach.
Been everywhere is not a great thing if you’re not appreciated in some places. Pick only the most effective locations for your business ads, and focus only on those channels. This doesn’t just save you advert cost, but it also maximizes your marketing campaign by providing you with the best results.
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What are your thoughts on how small business expenses can be cut? Please let me know by leaving a comment below.
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