Cost Control for your Small Business
Controlling costs and ensuring you are paying as little as possible for all your supplies is one of the most important things you can do as a small business owner. Whether you are just starting out in business or you have been in business for some time, you should complete a detailed budget which includes estimates of all the costs you are likely to incur in future periods. As far as costs are concerned the ‘name of the game’ is to reduce them where you can; this will mean more profit and more ‘money in your pocket’. We can have a look some of the common costs which you can look to reduce for your own business.
Telephone/ Mobile Phone/Internet
It is still surprising how many small businesses pay far more than they need to for their business telephone, mobile phone and Internet services. There are some great deals out there where you can get these services as a ‘complete package’ for a very good discount. Also, some providers are so eager for your business they are sometimes willing to under-cut their competitors to get you on board. Therefore, look to obtain the best deal for your business at the lowest possible cost.
Rent
If you run your business from an office premises, you will likely be paying rent to a landlord. If this is on a short-term lease, when the lease comes to an end, try asking for a rent reduction. Indeed, the current economic climate means that small business owners are scarcer to come by for commercial property landlords; thus this increases your bargaining power when looking for a cost reduction. Alternatively, if you are a very small business, you may consider working from home and thus dispense completely with the rental charge, and associated rates, electricity etc…
Advertising
What and where you spend money advertising should be reviewed on a regular basis. What adverts bring in the most business for you? What adverts do not generate any business for you? By considering these two questions it will help you cut back on the advertising that you do not need. Even where you decide to keep certain adverts, it may be possible for you to negotiate a lower price with the advertiser, especially if they have been hit by the economic downturn and are eager for your business.
Equipment/ Vehicle
If you plan to spend some money on new equipment ask yourself the question ‘do you really need it?’ If not, save yourself the expense. It could be a new fax machine, franking machine or other piece of machinery. Equally, you may have a car or van that could be replaced with a cheaper vehicle. As long as a vehicle serves the purpose you need it for, a cheaper one could save you a fair amount.
Electricity / Gas
Lastly, if you can get a ‘package deal’ for your gas and electric services then you may be able to lower your costs in this area. Again, certain companies may be willing to give you a discount or under-cut a quote that you have received from one of their competitors.
In summary, there are a number of costs that your business incurs that it may be possible to reduce over time. The above list of items is not an exhaustive list and you should be able to apply the same reasoning to all of the business costs. Also, do not be afraid to negotiate to get the best deal, especially when certain suppliers are queuing up to do business with you.
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