Struggling to keep your business profitable? You’re not the only one. 8 in 10 businesses fail within the first 18 months. According to Forbes, one of the most important elements that can lead to crash is inefficiency. You spend too much and fail to sell your products in the right market.
Lowering business costs and controlling how money is spent inside the company can help you to increase profit margins and run your business in a more effective way. Check these five methods to cut business costs in 2018, to run your company more efficiently.
Implement Automation Tools
When you automate processes inside the company, you get to save significant resources. Your employees don’t have to waste hundreds of working hours on repetitive tasks, having more time to focus on creative activities. This makes the more productive in the long run, as they manage to handle multiple activities in less time.
You can use automation in many different ways to improve workflows:
Marketing – there’s plenty of tools you can use to create effective landing pages, customized email marketing campaigns, and social media strategies. Better than that, you get web analytics and reporting tools, to measure your efforts and your results during and after each project.
Invoicing – managing hundreds or even thousands of invoices every year takes time. When done manually, there’s more likely to make mistakes and duplicate. In the end, automation allows you to speed up the process while reducing human error and increasing productivity.
Customer management – with a CRM software, you have all information about your clients in a single place. This way, all your employees can keep track of emails easier. Communication is faster and more efficient. Plus, it improves customer relationship and increases productivity.
Automation helps you accelerate processes, without putting too much pressure on your employees. It also leaves less room for human errors, which means you waste less working hours with solving small issues.
Use Deductions to Reduce Tax Bills
You can’t skip taxes, but you can track all business expenses to benefit from deductions. Discuss with your tax advisor about all expenses you can use to get new deductions – such as health insurances or vehicle expenses.
See if you can use the tax break to cut your costs, as well. However, pay attention to how many expenses you’re going to register. In the long run, your tax returns can influence your business development. And it’s not always a positive thing.
Outsourcing allows you to lower your costs, as paying a third-party company comes cheaper than recruiting new employees. Plus, depending on the scope of your projects, you can use freelancers instead of hiring in-house experts.
Besides trimming your costs, outsourcing brings in other benefits for your company. Such as:
Increased quality of the work – people you contract have years of experience in the niche;
24/7 assistance – when your partners work in different time zones, you can benefit from having your team working 24 hours a day;
No need for training – when you outsource, you don’t have to worry about training your collaborator, as someone else will be doing this for you.
Outsourcing allows you to stay competitive, as you manage to keep high standards for all processes inside the company, without increasing costs. In the long run, you manage to deliver high-quality products and services at affordable prices. Which translates into higher customer satisfaction and a boost for your revenues.
Cut Inventory Costs
Carrying costs of inventory reach between 20 and 30% of the purchasing price. Which means that you spend an average $300 for every $1,000 of stocks you keep in your warehouse. And prices can grow bigger, depending on the industry.
You need to optimize the inventory management for daily operations, to make sure no item in your inventory remains unused for too long. Otherwise, you’ll keep adding expenses to your balance, with no real return on investment.
Using a sales order management software, you’re not only lowering your inventory costs. You also improve workflows and win more time to dedicate to sales. This way, you get to grow your network and improve customer relationship.
It’s hard to believe, but all those printed documents moving around your offices add significant costs to your business. In the US, companies spend more than $120 billion on printed forms.
Here’s how too much paper can influence your costs:
Employees spend 30-40% of their time with emails and filing cabinets – filing documents costs you around $20 each month;
Each four-drawer file cabinet costs you an average $1,500 a year;
A misplaced document can cost as much as $125. Depending on the size of your business, a lost document can cost up to $700.
If you reduce the amount of paper in your company using file-sharing software, scanners and cloud storage, you get to save money. Plus, your operations have a smaller impact on the environment. And your employees are more efficient, as they don’t have to deal with all that office clutter due to files and papers spread all over the place.
To Wrap It All Up
Cutting costs is a challenge for all companies large or small. Yet, implementing new strategies is always easier for small businesses. And effects are seen faster. By implementing these simple methods, you’re going to increase employees satisfaction, boost productivity and improve customer relationship, besides the economical advantages.