Small businesses have little room for error. We all want more profits, so go through your budget and look for ways to cut expenses and save your small business's time and resources. Here are 12 resource-saving tips:
1) Be open-minded.
Your ideas may be great, but they aren’t the only route to success. Your team played a significant role in getting your business to this point—consider their input.
You can’t overemphasize the importance of an engaged workforce in your supply chain. Some businesses may not know an employee’s full potential. They could be bored. Let intrinsic rewards guide them on more challenging projects. Boredom? At work?! No way.
Motivate them through the afternoon blues with a customized mug with their business’s logo! This fosters a positive work environment and strengthens an employee’s commitment to projects and lets them know they’re an active part of the business. Nothing grows a business like having a dedicated team committed to its success.
2) Avoid outsourcing.
Some tasks are best done in house. Supervising outsourced personnel takes effort. There is no guarantee the employee is doing the job right until you get the deliverables.
In-house work allows for clearer communication, plus corrections can be made right away. Plus, outsourcing jobs can mean higher domestic unemployment rate for your local economy.
3) Don’t be distracted by every small opportunity.
There is no easy money. Pet projects cost your company and distract from strategic goals.
You’ll likely hit the bricks full-throttle until that “shiny opportunity” is achieved. A strong start usually means a strong finish. However, you’ll remain focused on the core fundamentals of the project. In other words, leaving no stone unturned and no questions unanswered.
Recognize the purpose of a project and its goals. For example, if you’re trying to build a submarine and you end up with a helicopter, you’ve failed (impressive, but it doesn’t matter).
Carefully set goals that are clear, definite and specific. Craft a select few—chasing too many objectives will not help you build that submarine. Your immediate goals should revolve around driving sales as quickly as possible, not pet projects.
4) Go energy efficient.
Some appliances, lighting systems or air conditioners have money-saving functions, including turning off automatically at night. You can improve your business’ bottom line by taking the following steps to make your office energy-efficient:
Encourage employees to be energy-conscious and offer ideas for saving energy. Employees are just as responsible for good energy practices as you are. Turn off lights and equipment when not in use, switch to compact fluorescent lamps, install LED signs, use sensors to automatically turn off lights, block direct sunlight with screens or film, regularly change and tune up HVAC filters, install programmable thermostats, and purchase ENERGY STAR equipment.
5) Keep up with credit card bills.
Interest rates are killers and can hurt your credit if you’re late. You could face legal action, wage garnishment and property liens. Even with one missed payment, your credit score takes a hit. Your interest rates go up, and you will incur late fees. There’s also interest on the late fees, and then there are over-the-limit fees. The balance can double or triple fast.
6) Be selective about trade shows.
Before you even look at your available options, figure out what you want to accomplish by attending the trade show. Do your goals include:
- Increasing leads or sales?
- Raising awareness about your company?
- Strengthening customer relationships?
- Launching a new product?
Only consider your trade show options once you have a strategy. With a few options in mind, find out how each show contributes to accomplishing your objectives.
Also, see what events are taking place nearby during the show. Even if those events are unrelated, they can affect flights, hotel rates and transportation. Lastly, consider how the timing of the show aligns with your customers’ buying patterns.
Trade show expenses add up, so find out about the costs involved ahead of time to avoid surprises such as show services, travel and expenses, promotional materials and shipping.
7) Advertise carefully.
Traditional ads are less cost-effective these days. Consider going digital.
Traditional ads aren’t targeted. They require resources and there isn’t as much ROI. They’re also seen as intrusive and annoying.
Folks spend a lot of time in the digital world exploring and shopping! Advertising digitally crosses paths with their digital journey. Bingo! Now you can more effectively target your consumers and optimize your ads for their digital interests!
8) Keep your business lean.
Be sure everyone’s pulling their weight. We can’t overemphasize the importance of an engaged workforce for increasing productivity. A performance-driven culture results in maximized savings, improved service levels, and an inspired team of talented employees.
You can’t afford to lose employees who work independently while still supporting team projects, performing other management-requested duties and following legal policies as directed.
9) Consider the cost of inventory.
Also consider writing or selling off old or discontinued products.
Inventory control applies to every item you produce, from raw materials to finished goods. It covers everything from purchase and delivery to using and reordering.
Efficient inventory control lets you have enough materials in the right place at the right time. It ensures capital is not tied up and protects production if problems arise within the supply chain. Ask yourself some questions:
- How reliable is the supply and are alternative sources available?
- Are the components produced or delivered in batches?
- Can you predict demand?
- Is the price steady?
- Are there discounts if you buy in bulk?
Or, you may choose to concentrate on the inventory of greatest value.
Lastly, the inventory (or assets) a business holds may become obsolete, spoil or become damaged or lost. When these situations occur, a company can write the inventory off or donate it.
10) Ask for shipping discounts.
If you aren’t looking for small business discounts, you’re missing a major cost cutter.
For consistent shipping discounts, most business side with a third-party logistics provider (3PL) for domestic functions and global operations. These providers offer many benefits: They reduce current and future costs, improve customer satisfaction, provide global expertise and reduce risk.
Accuracy and attention to detail are required in shipping. Avoid these mistakes and you’ll protect your company’s bottom line and save yourself a big headache:
- BOL (Bill of Lading) inaccuracies. BOL is the most important document associated with freight shipments. Make sure it’s 100 percent accurate. Using approximations for freight can be expensive, since there are additional inspection costs to reclassify charges.
- Relying on Transit Times. It’s important to remember freight carrier transit times are estimations and vary with weather, traffic, and mechanical issues.
- Incorrectly Packaging. Incorrect packaging is one of the main causes of damage. Know what you’re shipping and pack accordingly — different items need different packaging.
- Overpaying for freight. This seems obvious, but it happens more than you’d think. Double-check!
11) Improve your supply chain and production to reduce inventory.
Consider finding ways to speed up the production cycle. How?
It’s all about logistics. Management and employees work in unison to create a performance-based culture and keep its supply cycle running. Do not waste time measuring an outcome if it is not significant to customers and shareholders. Instead, reduce areas such as receiving, quality control, and shipping. This reduces error and allows for greater accountability.
12) Track every expense.
Your vendors could increase rates without you noticing. Negotiate with them to ensure contracts and agreements comply with services provided.
Do you know where your money goes each month? Tracking expenses, even those small daily expenses like coffee and postage, warns you if there are any holes in your company’s pockets.
Examine billing to identify unnecessary charges and correct any overcharging errors. You’ll be refunded any money your company has been unfairly charged.