Don’t Sacrifice Quality to Make More Profit
Starting a business is expensive. Keeping that business running is expensive. And if you want to keep your business going, you need to make sure that the everlasting battle between expenses and profits are being won by the latter. And not by a trivial amount; you have to have a strong and healthy profit margin if you want to stay afloat.
A lot of business owners make a few mistakes when they want to widen the gap between their expenses and their profits (presumably in the favor of profits). Quite often, they start making cuts in a few areas. This can be a wise decision, but what if you end up cutting in to the overall quality of your product or service? This isn’t a route you can afford to take. Don’t fall into the mindset that says you need to cut quality in order to maximize profits. It’s very much possible to make some cuts in your expenses without sacrificing quality.
In fact, that’s precisely what we’re going to look at today. But you probably already guess that by now.
Know your expenses
You’re not going to get very far with cutting business expenses if you’re not all that informed or up-to-date about those expenses! Getting all the expense data is a necessity if you want to start improving areas of your business. You need it if you’re going to make new purchases, or start investments, or hire new employees – and you definitely need that data if you need to cut spending.
A lot business owners actually completely underestimate the importance of all of this. In fact, many assume that they can do these sorts of tasks by themselves. Keeping track of expenses can’t be that hard, right? Problem: from the get-go, your business has a lot of intricate financial goings-on; buying assets, making deals, fulfilling tax obligations… it gets complex very quickly. If you don’t want to hire a full-time accountant, consider enlisting the help of accounting services. Not only will this make it easier to track expenses; it may also help you figure out tax areas in which you can save money.
Telecommuting is the way
One of the biggest costs a business will take on is that of the office. Not only do you have to acquire an office big enough to fit all the employees you’re going to need, but it also needs to be maintained. Something else to consider: the more employees you have in that office, the more you’re going to be spending on things like food and utilities. How can you alleviate this? Well, you could consider ensuring that any new employees you hire work from home. If you haven’t set up an office yet, then consider staying at home, or getting a very small office, and having most employees telecommute.
The cloud, portable technology, virtual business addresses… all of these things make telecommuting easier than ever. While some business owners think that it will affect productivity, many studies actually find that working from home can actually result in more productivity. This can save you a bunch of money when it comes to renting an office. You may even want to consider moving into a smaller office if you want to save money without cutting quality – or jobs.
Consider your energy costs
The modern business tends to use crazy amounts of electricity. After all, take a look at your typical office: it’s filled with computers, often on for the vast majority of the day. The lights are always on, even if it’s day outside. Over the course of a year, those costs really do add up. While those costs may be pocket change to a company like Google (well, less than pocket change to them, if that’s even possible), it can make all the difference to a small business.
It’s essential that you look into methods that reduce the amount of energy that is used in your business. If you’re not sure where exactly you could be making improvements, consider getting an energy audit. An expert will inspect your building and business and find areas where cuts can be made. They may also stumble upon electrical faults that are costing you money.
Glorious free software
When people start up a business, they usually get a plethora of suggestions when it comes to the software they should use. Quite often, those suggestions come from articles or experts that are trying to sell a particular piece of software! While a lot of premium software does feel really nice to use, the fact is that a lot of that software probably has a free alternative that does the job much better.
Let’s consider something like Microsoft Office, something of a ubiquitous item in modern offices. It costs an insane amount of money to get everyone in your office licensed to use Microsoft Office. But there are some really good free alternatives out there – the most famous is probably the OpenOffice suite, which does those various jobs just as well. And you shouldn’t be afraid to mix up such free suites, either. The OpenOffice alternative to Excel is, admittedly, pretty clunky… but Google Sheets, part of the free Google Docs package, works incredibly well.
Seek overcharges
Businesses, just like individuals, are often overcharged. We usually only see individuals as being overcharged by businesses, but businesses can also find themselves getting a bad deal… usually from other businesses, of course! These days, most businesses outsource some essential tasks in order to save money that they’d otherwise spend on getting full-time or part-time employees to do those tasks. But just because you’re saving money compared to a full-on hire, it doesn’t mean you’re getting what you’re paying for.
Make sure you’re not being overcharged for particular services; your accountant can probably help with this. If you feel that you’re being directly and purposefully overcharged, then work with another outsourcer. If you feel that the pricing seems fair on the surface but that the work you’re getting doesn’t justify the cost, then have a polite word with the business owner. It’s in their best interest that you’re as happy as possible with the product. If nothing improves, then be on the lookout for other services – and make sure you check independent reviews before signing up to anything!
Author: Admin Charlie
Founding member of MoonProject.co.uk
