Cost Management Strategies for Small Business Owners
Wed, 06/04/2014 - 5:47am | by Guest Contributor
Running a small business is a labor of love--often a great deal of labor. It is no small feat to operate a successful business. Many small businesses and start ups struggle to turn a profit for several years, especially in such tough economic times that put pressure on even the thriftiest of consumers. Taking the proper steps in managing your business's finances is absolutely essential for any owner, so start getting on the right track. By thinking critically and creatively about cost management now, you can help you business achieve healthy growth and success in the long run.
One of the best things you can do is work on employee retention. Companies with high turnover rates make themselves victim to a great many unseen costs. The loss of productivity incurred during periods of employee absence puts undue strain on your business's whole operation. Seeking new employees is time consuming, and will take you and your staff away from important work, further reducing productivity and increasing the strain on you and your workers. If you choose to hire recruiters or human resources workers to manage these affairs, you are further racking up costs. Try to make your business a good place to work, keep your employees happy, and try to retain them as much as possible.
Learn to be a bargain hunter. When shopping for supplies, don't simply opt for convenience or the most popular brands and retailers. Find ways to cut costs on your supply orders. For more insignificant items that are used up quickly, choose less expensive brands. Look for a supplier who can offer you the best deal on your regular shipments. These minor changes will amount to significant savings over time, reducing your overhead and increasing income after expenses are subtracted from revenues. A thrifty business is a profitable business.
Take a look at your technology. Old outdated systems can be more trouble than they're worth, and they can be expensive too. Old computer systems and IT equipment require more frequent maintenance due to their higher rate of failure. Consider upgrading your technology. The initial investment may be pretty large, but the long term savings will be worth it. The savings are not strictly maintenance related. Superior technology cuts costs in other ways; for example, computers capable of video conferencing can save you time and money on traveling and related expenses when meeting with clients. You can improve productivity in customer service by setting up instant contact over the internet. The possibilities go on and on.
The devil, as they say, is in the details. You can find cost management solutions everywhere if you know what to look for. Think about the things your company spends money on, and then think about ways that you could be spending less. No step is too small. Pennies add up into dollars, and dollars add up into fortunes. Start saving any way you can--utilities, technology, personnel, supplies, whatever you can think of. Something as simple as buying cheaper printing paper can be a great budgeting solution for your business.