Business cost management is a top priority for business owners. Day-to-day tasks are expensive, leaving little available funds left to expand your operations. And, while larger companies are typically held afloat by substantial financial backing, smaller businesses need to be rather more resourceful.
Here are five cost management techniques you might like to try in your business.
1. Make the most of technology
Investing in the right technology for your small business is one of the most effective cost reduction techniques out there. Technology can streamline business processes, free up valuable employee time, and drastically minimise your IT costs.
Cloud applications are a great place to start. For example, cloud storage services – such as Dropbox and Google Drive – can give your team the freedom to work remotely, allow you to outsource more efficiently, and improve collaboration among staff. Cloud apps are scalable, too, so you only pay for the service you actually need.
2. Minimise your overhead
Are you drowning in exorbitant overhead costs and looking to bridge cashflow insufficiencies? You’re not alone, especially if you operate as a traditional brick and mortar business. Things like rent, utilities, and inventory storage space can eat away at your profits; it’s time to brainstorm ways to cut back. Here are a few ideas to get you started:
- Contact your energy company and ask for a better deal or consider switching to a competing energy company. It’s a great idea to do this periodically.
- Consider transitioning into the e-commerce market if you haven’t already. E-commerce businesses have far fewer overhead costs – no rent, fewer staff, no utilities, the list goes on.
- If you already operate an e-commerce business, look into drop shipping. Instead of paying for inventory storage, the manufacturer or wholesaler of your products will ship them out direct to your customer.
3. Teach your staff to better manage their time
At the end of the day, time is money. With this in mind, improved time management should be one of the cost reduction techniques you implement most urgently.
If your team is not equipped with good time management skills, they can easily become distracted. Side-tracked staff are not productive and can drain your business of valuable resources. Here are a few ways you can improve your team’s time management:
- Hire a project manager to oversee tasks and ensure each team member is on track.
- Invest in a time-tracking app so you can see just how much time each employee is spending on each task.
- Ensure your staff know their work is valuable and contributes to the business’s success. Motivated staff are more likely to stay on task.
- Schedule time for your team to connect, chat, and have a little fun. All work and no play results in restless, distracted employees.
Thanks to the internet, you can now access talent from across the globe. Outsourcing is usually more affordable than hiring an in-house staff member. The cloud-based storage apps we mentioned above make collaborating even easier, and services like Skype, Slack, and Google+ Hangouts facilitate effective communication among teams scattered all over the country – or the world.