How to reduce business operating costs – no matter what your industry
Business owners can save a lot of money by making adjustments to the way they operate. Discover three steps you can take to reduce your expenses, regardless of the sector in which you’re engaged.
1. Pay invoices on time, or even early
This idea may seem counterintuitive at first, especially if your cash flow is sometimes strained and you’ve got into the habit of stretching payment times. But by paying late you can incur extra costs and also miss out on discounts.
Some suppliers may levy a late payment charge if you don’t pay on time. This can be expensive, and if the supplier is essential to your business, late payments can damage a vital relationship. You’ll be at the top of their list for price increases, and at the bottom of their list for urgent deliveries.
You may also be missing out on significant discounts offered for early payments. Reduce your costs in this way if your cash flow can cope with paying early.
2. Go green, save money
Being friendly to the environment is no longer the more expensive option. Going green will not only make you feel good and improve the image of your business, it will also help to reduce your costs in the following ways:
- Go paperless. Digitise your systems, scan documents instead of storing printed versions, and save money on paper, postage, printing, filing, archiving and waste disposal.
- Switch to energy-efficient LED light bulbs which cost less to run and last longer.
- Investigate green tax breaks or cost rebates for conservation covenants and small-scale renewable energy systems.
- Improve your building’s energy efficiency when extending or renovating.
- Increase employee productivity by landscaping around your premises to promote cleaner air and a more relaxing area for breaks.
- Embrace telecommuting. COVID demonstrated that it can work well. Reduce costs by downsizing the space you need, while improving employee morale and retention via your flexible approach to working from home.
3. Cancel unused services
It’s easy to overlook direct debits to your business bank account for subscriptions to journals you no longer use, account-keeping fees for dormant bank accounts, or maintenance contracts for equipment you no longer have. It’s worth spending some time to go through your bank statements to look for these unnecessary costs which are no longer adding value to your business.
While you’re doing that, also keep an eye out for any regular costs you’ve lost the habit of questioning, such as your electricity bill or telecommunications and internet service. You may be able to cut costs by switching to a new provider, or simply by contacting your existing supplier and telling them you’re thinking of switching.
This article originally appeared on Tudor Insurance Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Tudor Insurance Australia.