It’s always a good idea to be on the lookout for ways to increase your profits, and luckily, there are many ways to do that. One way is to focus on cost-cutting, and here are five places that are good to periodically review for cost-cutting possibilities.
Telephone: Re-negotiating with the phone company every one to two years is a really good idea. Many telecommunications companies will often bargain with you or offer you a new deal just for checking in with them.
Has your business changed? Do you need all those extra features you are paying for? Could you do without those extra lines? Would another phone plan save you money on long distance or international calls?
The risk is low: one quick call will let you know if you can save money in this area. It’s worth it to give it a shot, and while you’re at it, you can call your smartphone provider too.
Travel: Travel is always a great area to look into for possible ways to save. Are all trips necessary and profitable? Are there any meetings that can be done virtually instead of face-to-face? Virtual tools such as GoToMeeting can make travel unnecessary.
What trips can be cut this year? Can the number of people sent per trip be cut? Can travel arrangements be made early to save money? Are booking dates flexible so you can compare and find the lowest rates? Is a taxi or rental car cheaper?
Dues and Subscriptions: Paying our annual dues for the club or association we’ve belonged to forever may be a habit, but is it beneficial for your business? We might enjoy seeing everyone once or twice a year at the meeting, but we may not necessarily have to have a membership to do that. Sometimes paying the guest rate is more affordable than the member rate if we are attending infrequently enough.
Review a list of organizations and publications you and your employees are part of, and choose which ones you are truly benefiting from. If being an officer in one of your organizations is not getting you any new business, then you may eliminate a time drain by bowing out and letting someone else volunteer.
Labor: As your business grows, it can be a challenge to decide who to hire next. The first place to look before you decide should be your existing employees. What tasks are they doing that you are paying them too much for? For example, do you have a manager doing clerical work? If so, you may be able to piece together an administrative job that frees your current staff from all the clerical work they are doing.
It’s worth a look to see where your current employees are being overpaid and find someone to do those parts of the job. You’ll save labor costs and come out ahead in the long run.
Fixed Assets and Equipment: Another place to save money that can be significant is purchases of large items such as furniture, automobiles, and production equipment. It’s a good idea to get three bids from reputable vendors so you have a choice. Going with the lowest bid is not always a good move; going for the highest quality is.
Look in these five places, and let us know how much you find to increase your profits. As always, if we can help, let us know.