10 Expenses To Cut Back On If You Want to Improve Your Productivity and Profits
If you are running a small or medium-sized business, it is important that you keep your head above the water and remain competitive.
You will have to face huge competition and understand that you are in business to serve the needs of your clients and make money at the same time. You will need to look at your income and expenditure and find out where your profits are disappearing each month so you can make an adjustment in your business budget.
Below you will find a few pointers on where to look.
#1 Rent
The first thing you will have to check is whether you are paying too much rent. If you are not earning enough to cover or justify the cost of the rent, you will need to look for cheaper accommodation for your business or increase your prices.
If your market cannot take the price increase, you will need to improve your productivity or your volumes, or there is no point being in business for a couple of dollars here and there.
Consider the rent as a part of your production cost, so you can work out whether or not you are making enough money to survive long term.
#2 Cleaning and Property Maintenance
If you have an affordable business property and you feel like you found the perfect premises for your business, you can still overspend on maintenance and cleaning.
You will always need to compare different offers and choose the company that offers the most benefits and value at the lowest cost.
You might not want to sign up for a daily cleaning schedule, just because that is the only package the company has to offer.
#3 Advertising
It is important that you use your advertising budget with your return on investment in mind. You should choose your advertising channels according to the market you are in, your customers’ behavior, and the goals you have.
If you are starting off with a limited budget, you will need to make sure that you are monitoring your customers’ preferences and trends.
You can sign up for affordable social media management services that will allow you to see where your Facebook followers are coming from, and how they engage with your brand before spending money on advertising.
#4 Legal Fees
Whether you are looking to incorporate a new company or take on a new employee, you will have to compare the different legal fees and packages.
If you are regularly using human resources contracts and need guidance with customer agreements, having a retainer contract might be a better option than paying for each service individually.
Make the most out of your budget by comparing the different monthly and one-off prices so you can get the service that you need when you need it.
#5 Accounting
Most small and medium-sized business owners simply don’t want to bother with getting their accounts and invoices in order. The good news is that you don’t have to do it.
In fact, there are loads of apps you can use that your accountant can work with once you have recorded all your invoices and payments.
You can simply input the receipts and let your accountant balance the books and help you see clearer about your finances.
#6 Taxes
Nobody wants to pay too much tax, but avoiding it is a crime. However, if you know about the latest government tax credit and rebate schemes, you can maximize your profits and reinvest your profits safely in your business.
No matter if you are looking to innovate, introduce sustainable policies, or revolutionize your industry, there is certainly going to be a rebate to take advantage of.
#7 Training
If you think that you need a training company to get your employees up to speed with the latest policies, regulations, and technologies, and you have to pay them to come to your premises, you are mistaken.
There are several different accredited business training programs that you can subscribe to and allow your staff to take courses on whenever they feel like they have the time.
Apart from the obvious platforms, such as Alison and EdX, there are some specialist companies that offer a flexible platform to suit the needs of your individual employees.
#8 Machinery
Your production tools are important for your business, as without them you will not make money. That is why you will have to choose your maintenance company carefully and ensure that you are not paying more than you have to on regular maintenance and servicing.
You can find a company that will help you find compressor parts fast, so you don’t have to wait around and missing deadlines. Of course, the price will also be important if you are using the machinery regularly and some of the parts need replacing every couple of months.
#9 Equipment Maintenance
You will have to count the cost of maintaining your production equipment and your other machinery. From your computer to your forklift and your fleet, there are things that can go inevitably wrong. That is why it might be a good idea to find a company that deals with safety checks and other maintenance, so you don’t have to wait for the two services separately.
#10 Travel
You might think that the cost of travel is already included in your prices, but it all adds up. If you meet all potential clients in person, instead of focusing on the ones with a greater profile, you will end up spending too much and blowing your profits out of the window.
Work out your conversion rates and find a way to track your client entertainment and travel cost. At the end of the day, you can always set up an initial consultation through Zoom and ask the right qualifying questions before you would meet in person.
It is important that you look at your budget critically from time to time if you are a business owner. Check whether you are spending too much on your maintenance, property, or employee training.
