When you consider the fact that the majority of business fail in the first five years, cutting costs and improving efficiency should be the mantra of any startup. If you follow sound financial principles, you can turn your business around and start pulling in a profit before your business reaches the dreaded state of no return.
When you’re trying to cut costs, the goal should be to simplify the amount of work you have to do and reduce the number of people necessary to run your business. However, this doesn’t mean cutting employees from your workforce. Unless you’re vastly overstaffed, nothing kills a business and the morale of the employees faster than a firing spree.
Don’t Cut Business Services
The first thing that people turn to when their business starts to struggle is places where they can reduce. Cutting business costs won’t get you the kind of customers you want, and it’s only a temporary solution that never fixes the actual problem. When you cut your business’ services, you’re only reducing your ability to respond to new clients and generate new business.
Cutting staff rings a death knell for your company, and you should only start cutting staff as an absolute last resort. With fewer employees, you’re not going to be as productive. The fact is, you’re going to need those trained and knowledgeable employees to turn your business around.
Utilize Drop Ship Services
There are several ways to reduce your fulfillment costs. One option is to include drop ship services to decrease overhead and increase your efficiency. Drop ship companies make it easier for your company to fulfill orders, especially if you don’t have a lot of warehouse space available.
These usually offer the ability to store your products in the company’s warehouse for greater convenience. Reputable drop ship companies generally offer pick and pack fulfillment services, and you’ll get faster turnaround times to help your business become more efficient and productive.
While you shouldn’t cut any of your business services, you should definitely renegotiate them. Businesses have an assortment of bills to pay, but just because you have service doesn’t mean you’re getting a good value. Do some research and find out about other companies in your area that can provide your company with Internet, phone and other utilities.
You should also renegotiate your credit lines and loans. Cutting a few percentage points off your interest rate could free up a substantial amount of money over the course of a year. When you contact your current provider to cancel your services, explain to the representative that the only way to keep your business is to get you in contact with a supervisor with decision-making authority. Additionally, don’t pay any of your bills late. Just don’t do it. If your business is struggling, this is not an area where you should fall behind.
Manage Your Time
You’re not managing your time well—this is a universal fact, because everyone can improve their time management skills. Look into different time management systems, like the principles explained in the Pomodoro method. Set mandatory intervals where you work for 45 minutes to two hours without a break. Then take a short break and repeat the process again.
Schedule your activities the night before or in the morning before you head off to work. You’ll be amazed at how much more efficient you’ll be if you schedule your tasks and write down your goals for the day. Some people work best when they concentrate on one task per day. While this may be difficult for a business owner, the point is to find your time management trick that works for you and use it.
Get rid of any paper in your office. Use digital methods of tracking all information and data. Getting rid of paper will help keep the office cleaner, and it can save your office up to 40 percent of the waste your office churns out daily.
Printing supplies, paper, toner cartridges and other supplies all cost money. If you’re not reviewing your supply expenses on a monthly basis, then you need to move to a weekly review for the next month and find ways to cut down your office supply expenses.
Participate in the Community
The most important thing you can do to improve your business is to get more business. Make yourself known in the community, get to know the people you service. Hold fundraisers for charity events, and get your company out there in front of people. Drop business cards and network with people online and in the real-world. You’re the face of your business, and you need to continually market it to increase your customer base.
Cutting costs can be a great way to both reduce your overhead and, potentially, save your business. By reducing a few unnecessary expenditures, learning to manage your time better, and taking a closer look at your process, you can ensure your business has the best chance at success for years to come!