One way service businesses can get a better hold of their cash flow is by getting a clear picture of their business spending and then finding ways to trim that back.
To help you evaluate areas of your business where you might be able to save to save, here are five easy ways a business can cut costs, without compromising the quality of goods or services.
1. Go for Bundled Packages
Your Internet and phone packages can be one of the larger (and most necessary) monthly expenses for your business. If you are not already using a bundled package, call your service provider to find out how to combine these costs to receive major savings. Many cable and telecom providers run occasional promotions and may not let existing customers know about these promotions. Call and ask them if you have been missing anything. Be persistent. Also, fees can change and different providers may have special offers at different times of the year. Always be shopping for better prices. By aggressively chasing better offers, you will be in a better position to pay the least amount for Internet and phone services.
2. Look for Cheaper Software
One of the easiest ways to cut costs is with the software you are using for your company. Most likely, there is a cheaper version of what you are using. If you’re paying a lot in licensing fees for your accounting, inventory management, CRM or marketing software, there are great SaaS (Software-as-a-Service) applications on the market. You can find many online versions of what you need for a low monthly cost or even for free. Take a look at your software and find out how much you are paying for each program. Pick the most expensive software packages you are currently using and look for alternatives.
3. Go Green
Another great way to shed costs is to go green. Not only will you save money, but you will be conserving paper and electricity, which is an effort we should all be contributing to. So, where do you begin?
- Have an energy savings plan for all electronics. Turn off lights when you leave your office or if you’re not using a particular part of the office space, keep the thermostat down, and put all computers and printers on energy-saving mode.
- Print less. Encourage your employees to print only the pages they need (instead of the entire document) and learn to love the scanner. Trying to save a webpage? Print it as a PDF file; this creates a new electronic document that you can save on your desktop instead of printing.
- Cut back on supplies. Instead of giving everyone their own set of supplies, set up an area for community supplies. Include things like staplers, scissors, envelopes, and binders.
- Reuse your electronics. Instead of always buying the newest models of electronics, take a look at what your employees really need and try to solve the problem by, say, buying more memory or a new monitor, before going for a completely new machine.
- Automate your payments. Instead of waiting to get an invoice by mail and then sending a paper check, automate your bills to save on postage. They will send you emails instead of mail and you can pay with a credit card. Although this doesn’t cut immediate costs, this can keep you from paying late fees.
- Credit Cards. With a credit card you can take advantage of points or cash back rewards. Just be sure to pay off the balance before latest accrues!
4. Consider Joining a PEO
Did you know there are opportunities out there to join forces with other small businesses to create one large human resources conglomerate? They are called Professional Employer Organizations (PEOs). PEOs enable you to cost-effectively outsource many of your HR responsibilities. They oversee your company’s health benefits, workers’ compensation claims, payroll and payroll tax compliance. They deliver these services by effectively pooling all the employees of their clients and getting better pricing and better deals from benefit providers. Here are some of the advantages:
- Timesaving on administrative human resources work (i.e. on-boarding papers, employment eligibility verifications, workers compensation, payroll paperwork, etc.)
- No more hassles about compliance, risk management and employment practices. They keep you up-to-date.
- You get access to incredibly comprehensive benefit packages that give you access to such things as health insurance rates that keep you competitive in the labor market.
5. Join a Buying Group
As we discussed above with PEO’s, small businesses receive awesome discounts when they come together as one. This same idea can be applied to purchasing office supplies and equipment. How? Look into joining a cooperative buying group. As a group you will be buying in larger quantities, so you will be more likely to get bulk pricing you would not otherwise have received. With the combined buying power of your group, you can meet the enormous purchase minimums you could never afford on your own. Sometimes, you even get better payment and freight terms and with certain-sized orders, wholesalers will waive the freight altogether. To learn more about cooperative opportunities and get other helpful business advice, check out these three free and low cost resources in your community.