10 cost-saving ideas your business can try
Cost-saving ideas your business can try
Why is saving costs important to the success of SMEs?
Companies should always be looking to gain profit and continue their growth. An easy way to add a boost to the bottom line is to cut down on unnecessary business costs and trim outgoings. Now with the current global economic uncertainties, there’s no better time to properly take stock of cost items related to your business. What’s more, SMEs are facing constant rising costs and ever-reducing margins. Having said that, these issues can be countered by researching and putting into place appropriate cost-saving measures.
Does your business really need to save costs?
SMEs should continuously explore ways to save costs even though they may be doing well. As a business owner, you can never know what’s around the corner. You can plan, research, and forecast but there’re so many variables in place that it’s impossible to determine everything. Therefore, it’s your responsibility towards your business – and potentially the people you employ – to reduce your expenditure wherever possible and stay profitable so that you may weather out a rainy day or two.
Here are our 10 tips for saving costs
There are so many ways to cut costs and make your money work for you; our list is just a fraction of the possibilities out there.
1. Outsource your staff
Employing staff to be stationed on-site cost so much – you must provide them with an office space, furniture, utilities, and technology, other than a salary and benefits. Telecommuters on the other hand, do the same work but without any of the overheads to outfit an office. If you can make any part of your business work with telecommuters or even freelancers, you’ll instantly save money. Hot desking is also a viable system to reduce the need for work space. Add to that, instead of having skilled staff on payroll sit around waiting for a job, you can offer them payment for a project only when it’s secured – on contract basis. By doing so, you need only maintain a small team of staff that does the everyday routine jobs.
2. Save energy
Go green for both the PR sway and cost saving on your bills by cutting out extraneous energy usage. In the office, switch off lights, air conditioner, and technological equipment at the socket when the office is not in use – during lunch times, in the evenings, and on weekends. Studies had shown you can save 20% to 30% of your electrical bills just by stamping out electricity leakages this way. The water cooler or heater should be switched off over the weekend too. You can introduce energy efficient bulbs for your lights – better still LED lighting – that consume less electricity or upgrade your old IT equipment to reduce energy consumption and waste, e.g. a printer that automatically prints both sides of a piece of paper. You should explore government funding, like Productivity and Innovation Credit (PIC) Scheme and Innovation and Capability Voucher (ICV) programme, that are catered to SMEs for your purchases.
3. Shop around
When buying something new for your business, don’t grab the first price you see. It’s worth taking a little extra time to look around – see what else is out there and if you can discover or negotiate a cheaper price point. Of course, always ask for a lower price – if you don’t ask, you’ll never get. And no last minute shopping – plan ahead of your actual requirement. Try bartering as well, offering skills to swap in exchange for other skills or necessary business items. You’ll reduce costs throughout the business if you can dedicate a little time and effort to the process.
4. Buy used equipment
Instead of adding to mounting costs by purchasing everything new, buy second-hand furniture and office equipment. You could buy out the fittings of a closing business or get a good deal by going to a clearance sale or budget warehouse. You can create something just as effective using second-hand gear – that may only be 1 or 2 years old – as you would do by using a new one.
5. Start a cooperative
Consider teaming up with a neighbouring business to share marketing costs. So long as you aren’t competitors but are in complementary industries, this will be a win-win situation for all parties involved. Imagine a wedding planner teaming up with a bridal salon to deliver co-mingled mail-outs – the audience for both companies is instantly doubled and likely to result in more sales because the audience is already in the market for your products or services. Even if there’s no complementary business near you to share advertising and promotions costs with, combining purchases of office basics like stationery, tea, or toilet paper and taking advantage of bulk discounts can be a good way to save money among neighbours.
6. Renegotiate repeat contracts
If you’re paying a fixed price for a repeat order every month, consider renegotiating with your vendor to lower their rate. After all, a repeat purchaser is going to be worth it to them, long term, so they’re more likely to consider re-evaluating your price to ensure you’re getting the absolute best possible. You should put in a little research, to see what other vendors would charge for the same service and have the information on hand to aid you while you make your case for lower prices.
7. Learn something new
Just think: Every time the toilet gets choked or your computer hangs, you have to pay to get a specialist out to fix the problem. Consider this: Instead of having to hire in help to sort out a particular issue over and over again, why not hire the expert once to teach you how to do it yourself? Then when the problem rears its head again in the future, you’ll be there on hand ready to sort it out without expenditure.
8. Showcase your expertise
If your business sells knowledge or special talents, you need to get your name out there as an expert in that field in order to gain new clients. There’re many different ways to get the word out – try chatting with potential clients online in advice forums, teach a night class, or contribute articles to local newspapers. Anything that shows you know what you’re talking about is going to be a valuable source of free marketing for you and your business. Another way is to make sure your company website is a lead generation engine for your business.
9. Get sponsors
When throwing events or putting together packages for your customers, try roping in a sponsor from a related industry. It can help with cost sharing – and expanding the pool of potential new customers. Of course, the sponsor will benefit from your pool of contacts and the exposure from your event – a win-win situation for both.
10. Raise the excess on your insurance
Insurance is inevitable in the business world, it helps cover things from employee healthcare to public liability. Consider raising the excess on your insurance plan to lower the recurring fees you’re paying for the insurance policies. Even if you end up having to pay the excess, it’ll likely be less than the total you’d have saved through paying less for the coverage over the years.