A business can’t really make a profit without trimming down costs, regardless of the size of its income. In fact, decreasing the costs of doing business is just as important as increasing your income. This guide will help you decrease the costs of running a business and is equally beneficial for those on a shoestring budget, just as it is for successful businesses.
The dream of being our own bosses is finally within our reach – nowadays, professionals can earn their bread and butter independently, as freelancers. This means that young professionals can post their CVs and portfolios on freelancing websites, like iWriter or Freelancer, offering their services to those who need them.
So, what does this mean in terms of trimming down costs of doing business? Well, outsourcing online, or “cloudsourcing” basically allows a business owner to hire professionals when needed. These professionals are perfect for covering your temporary business position requirements, such as website designer, or graphic artist – experts that you really don’t need to keep on “retainer”, on a full-time payroll. Cloudsourcing brings flexibility to the table and allows you more wiggle room in terms of planning, while cutting down costs.
Sure, hiring freelancers to do a job that you currently need doing is smart, but keep in mind that freelancers, like your own full-time employees, are professionals; and experts will always charge heftily. Forking out extra dough in order to make sure that a job is done professionally and without mistakes and hiccups is always the best solution, but if you’re looking to cut these costs, designating a couple of tasks that simply aren’t as important as others is an excellent tactic – tasks such as putting paper into the printer and the fax machine, ordering and bringing food to other employees and occasionally helping with simple work-related stuff.
Temps are a great solution here, as temp agencies charge much less than freelancers, but hiring temporary workers does come with a fair share of downsides. If a job requires little or no responsibility, you can even end up not paying anything. By going around the local colleges, you can opt for hiring interns who will be happy to work for just a recommendation they will be able to use later and they won’t mind performing a variety of tedious tasks.
This is a valid business money-saving tactic. A good entrepreneur knows what to buy for their business, but an outstanding entrepreneur knows where and when to do so. The best way to go is to always be on the lookout for discounts and keep track of what you need to buy or replace in the near future. Keep in mind that this takes time, knowledge and dedication, as the vast majority of top retailers won’t advertise their discounts. Showing gumption is the key here; waiting for discounts to appear at your doorstep is never a good plan – you have to go ahead and start dialing phones and visiting retailers – it’s all about initiative!
You will most likely get discounts when buying in bulk; which, if planned carefully, can hugely cut down your costs.
Careful with Buying in Bulk
Buying in bulk, however, can be an extremely slippery slope. The main reason why retailers offer a bunch of items on discount is that they need to sell them quickly. This can be as a result of cash flow difficulties, but also because the offered equipment is of low quality, and this is something you do not need. In fact, even if the discounted bulk items are great, it’s easy to get blinded by the ridiculously low price and go all-in, cashing it out, which is pretty much like buying a luxurious car for a steal: the price may be low from considering how good a car is, but it still might be too expensive for your budget; it’s like buying a brand-new Lamborghini for $1,000, when your total budget is $1,000 – what use of a cutting-edge car, if you can’t afford gas.
So, essentially, buying a thousand pens for $500 is worth it only if you can make use of this number of pens, otherwise, the only thing buying in bulk will do is put a dent in your budget.
Storage Space Efficiency
If your clients aren’t satisfied with your deliveries, they might not come back for more, regardless of how quality a product you’re pitching. As a matter of fact, your customers will appreciate efficient deliveries to such an extent, that they will be more likely to disregard an occasional mistake.
Deliveries are usually late due to warehouse inefficiency, meaning that you either don’t have enough personnel dealing with your storage, or that you don’t have the right equipment, such as scissor lifts, elevated work platforms, etc. We recommend that you allocate a portion of your budget towards buying new equipment; alternatively, you can always opt for renting, which can a much cheaper option, when you need a piece of equipment temporarily.
Buy used equipment
In order to function properly, your business will need some cutting-edge equipment, but this doesn’t mean that there is no place here for used stuff. Think about buying used printers, fax machines and even computers, as this will greatly trim the costs.
Of course, if your business specializes in, say, computer games, going with a used PC is most likely a no-go – computer power is not the only thing you need, a valid warranty can go a long way in helping you save money, should a computer break.
There is no denying the fact that increasing income is a pillar of success, but trimming down the costs is another one. Keep cloudsourcing in mind, hire temps or interns, make sure that your storage is being run efficiently, always keep an eye on used equipment and discounts, but be careful when buying in bulk!