With our economy slowly starting to see the hint of recovery after the COVID-19 lockdowns, there is still great need among businesses to reduce costs wherever they can in order to keep cashflow for where it matters.
Today, we’re documenting another five ideas we’ve found where small businesses can save costs in a way that will actually make a difference:
Power Down Nonessential Lights, Appliances, and Machinery After Hours
This has to be the simplest tip, but powering down lights, appliances and machinery after hours is a top way for offices to reduce unnecessary costs. In a corporate office-space, personal workstations comprise the largest non-essential energy consumption.
On-site servers, telephone systems and other network devices fall into this same category, and consume large amounts of electricity during the nine to twelve hours that there are no employees in the building. In offices where there are other machinery such as printers, manufacturing equipment or other devices, put processes in place to ensure these are shut down before the last person leaves the office.
Another way to reduce costs on these devices and equipment is by moving to the cloud where possible, like with your server and your telephony.
Track your inventory better
If you run an inventory-based business, you’ll find that a lot of your cashflow is sitting in your stock room, gathering dust. By monitoring inventory more closely, you can reduce your expenses by ensuring you only buy the minimum you need to complete current orders or projects, rather than holding your cashflow strapped down to inventory items that sit on the shelf for weeks or months. Another option is to contemplate consigment, if you can negotiate that with your current suppliers.
Use Freelancers and Contract Labor for Non-core Work
Outsourcing is becoming a more widely used practice as businesses find that it is cheaper to hire outsourced skills because you have strictly enforceable deliverables, provided you have a well written contract, and you aren’t expected to pay for freelancer’s medical aid, retirement annuity, family leave or paid annua leave. All you pay them for is completed work, or a set of tasks to be completed as required , once-off or monthly.
Stay on top of your taxes
There are many clever ways to manage your business finances to reduce costs. One of the simple ways to cut costs and improve cashflow is by managing your taxes better.
As we are heading towards the new financial year for many companies, setting up a planning meeting with your account to see how you can shift income and expenses may be a way for you to reduce costs, by shifting receivable income into the next year to reduce taxes in this financial year.
Generate more website traffic, which could result in more leads
Less of a cost-cutting exercise, depending on how you look at it, but if you can implement marketing strategies that will drive more traffic to your website, you could see an increase in income which means you don’t have to worry as much about the cost-cutting because the revenue and the cashflow is there for you to manage all the other costs.