Cutting costs is a crucial part of running an effective and profitable company. This is true, no matter how big or small your business may be. You might be one of the key players on the market but keeping costs low will still be important. You never know when the market might turn and leave you in a lull. At that point, you’ll be glad to know that your business costs are less than they should be. You will be able to stay afloat on the market, without taking emergency cost-cutting measures such as downsizing staff numbers. Taking this type of action can reflect badly on a company and damage the brand of a business. The question we want to ask today is whether your business is as cheap to run as it could be. Are you cutting costs and saving money in the right areas. Or, are you still wasting a lot of cash in your business? We’re about to find out.
The cost of energy
The common phrase ‘time is money’ should be changed to ‘energy is money.’ It’s more appropriate in today’s economy. The more energy that you use in your business model , the more money you’ll be wasting. That’s why you want to do everything that you can to cut the costs of your energy spending in any way you can. There are plenty of different routes to take to succeed with this goal.
We suggest that you start quite simply by looking at renewable energy sources. Renewable energy sources are one of the easiest ways that you can cut costs. Take solar power as an example. By investing in solar energy , you’ll be able to cut your electricity costs to almost zero in the summer months. Or, if you live in a windy area, a turbine might be the best device to invest in. Both equal expensive first installation fixed costs but they will be worth the money in the long run. As well as this both environmental agencies and governments are offering incentives. You might get money for making your company greener. Of course, renewable energy is just one of the possibilities. There are other changes that you may wish to look into.
For instance, you can think about switching the lighting in your office. It might seem like a small change and in a way, it is. However, using different lighting in the office could have a big impact. Particularly, if you switch to LED bulbs. LED bulbs are 1000 times more powerful than a halogen bulb, and they use a lot less energy. This isn’t the only small change you can make that will result in a huge difference.
You can look into the tech that your employees are using. Are you still giving your employees big bulky computers to work on. These use massive amounts of energy and in the long run, it would be better to provide MacBooks to employees. These are some of the most eco-efficient laptops on the market. One of the reasons many businesses face such high energy costs is because they can’t see the bigger picture. If you want your business to be energy efficient, you need to think about five years from now, rather than tomorrow. The amount you save in the long run mean these changes to your business are free.
Services you should outsource
It’s high time that every business on the market starts to think about outsourcing. That’s true whether you’re running an office or a heavy industrial factory. Either way, you need to make sure that you aren’t paying excessive amounts for jobs you can hand off to other companies. Outsourcing can cover a wide range of services. However, these are the specific services that you should think about handling out of house.
IT support and network organisation is something you should outsource for a few reasons. First IT support is a lot of work and due to this, it requires a large staff. If you don’t outsource, you’re going to have to hire these staff full time. That’s expensive because IT professionals are in high demand right now. As well as this with outsourced IT you can guarantee that any issue will be dealt with quickly and efficiently. You won’t have to wait around for the problem to resolve itself which would be a serious issue for business owners. Most modern companies are entirely dependent on the tech at the heart of the business. Without it, they would struggle to make any impression on the market.
Another service you need to consider outsourcing is legal. Lawyers are notorious for being expensive hires and yes, that does include HR. Your HR staff are a legal team so it’s no wonder they are an expensive hire. Instead of adding all those paychecks onto your list of costs, outsource the issue. You’ll get a professional service from a team that you can count on.
If you’re working in the manufacturing business, you may want to consider specialisation. Specialisation simply means that you produce a specific part of the overall product. Essentially your business becomes a company primed for outsourcing. You’ll get a lot of demand for businesses that need the part you are producing. This is perhaps the easiest way to keep a manufacturing firm cost effective in 2016.
The problem with marketing
The problem with marketing is a false assumption. There are many businesses on the market right now who believe that marketing a business is cheap. In fact, most new business owners assume it is free to market online. Of course, this isn’t the case, and they quickly discover that. While technically, you can market for free online, you won’t see much impact from a DIY marketing campaign at all. That doesn’t mean that you should start reverting to offline marketing forms, though.
They have been far too expensive for a long time. Using offline promotion would quickly push the costs of your business up. That leaves you with one question and no answer. What’s the best and most cost-friendly way to market your company.
Again, part of the answer is outsourcing . You can use a marketing agency to set up the promotion of your company for you. However, you can also set up areas for marketing yourself, with no cost at all. It’s easy to get social profiles established that benefit for your business. Similarly, it’s not difficult to use these social networks in a way that encourages customers to interact. If you do this, at the same time as a professional campaign you’ll certainly see the results you want. More importantly, though, it will be at a price that you can afford.
If you want to cut costs in your business right down, you need to consider how to make your company more flexible. A flexible business model will help you control expenses because you won’t be spending money in unnecessary areas. For instance, it might be possible to set up your business to run from home. Immediately, you have cut the cost of an expensive office space. From there, the situation can snowball into a massive cost saving model.
Since you are running your business from home, you won’t need a full-time staff. Instead, you can hire freelance workers. This is route many new tech companiesare taking for one key reason. If you hire freelancers, you have no responsibility for their welfare. You don’t have to give them expensive benefits are incentives to continue to stay loyal to your business. Instead, you can hire and fire them as you please.
Then, there is the cost of meeting and greeting clients. In the past, this involved expensive trips that were only partially covered by tax deductions . Now, you can talk to customers and clients online, face to face through video conferencing. There is no need for employees to leave the office or fly to different areas of the world. Everything can be completely online at minimum cost.
Outsourcing fits in beautifully with this type of flexible business model. Any job that can not be handled by your business, you can outsource to another company. This can all be arranged online, and the best part is your customers won’t know. You’ll be working at lower costs but with customers, you can make it look like you’re the biggest company in the world. You can do this by using a virtual office, set up as your official business address. Clients will never know that you’re working from home. You can run a cheaper business and still keep up appearances.
These solutions cover just a fraction of the ways you can cut costs in your business. There are many more, but we think if you use these tips, you’ll find your company far cheaper to run. You’ll still be a driving force on the market, and you won’t have to worry about heavy costs. If the economy does shift, you will still be in a great position to make big profits .