It’s all about the bottom line when you’re in business, and if you’re a small or medium enterprise (SMEs), making as many savings as possible is just as important as your revenue.
Thankfully, even small adjustments can have a profound effect on your profits if you apply them carefully.
Below are nine tips to help entrepreneurs and small or medium enterprise (SME) to do more with less, and to prove that saving money does not mean sacrificing profit.
Look over your ledger
You should review your ledger at least once a year and look for where money can be saved. This could be by doing away with small subscriptions to trade magazines you don’t read anymore, or by reviewing your suppliers costs. You could also swap your utilities companies like Woav offer cheap telecoms packages to small businesses, for example.
Think twice about new clients
As a small or medium enterprise (SME), you should always be looking for new custom, but don’t just blindly accept new orders or customers. You should look at how well these companies are performing themselves. Are they thriving enough to pay on time? Are they notoriously difficult to work with? Always do your homework.
Keep your workforce mobile and flexible
Look at each prescribed role in your company and ask if it needs to be full-time or not. Could the job be outsourced, or could you bring in a consultant? If you use freelancers, you don’t have to pay for their desk-space and if you have a regular person, you build up a good relationship. Aim to pay a good rate, though, so you get someone who does a good, swift job.
Pare down or rent out the office
Try not to have any space hanging around unused, as you’re throwing money away! If it’s unavoidable for some reason, rent it out so that you’re at least recouping your costs.
Outsource secondary functions
Functions like payroll, sales or accounting don’t need to be handled in-house, especially if you’re on an economy drive. You might find that you save a lot of money by outsourcing them rather than keeping someone on a salary.
Treat your best people well
Staff turnover is very costly – looking for someone new, training them and “bedding” them in is a big investment. This is why it’s best, once you’ve made that investment, to keep hold of them. Look to retain great staff and to improve members who are slightly under-performing.
Make sure everyone gets involved in saving money. Have a brainstorming session or two to come up with ways to shave off a few pence here and there. Look at wastage, look at ways to improve efficiency and encourage some out-of-the-box thinking.
Club together with neighbours and contacts
If you have a few chums in your sector, or if you share a building with friendly enterprises, ask them if they want to collaborate to get bulk discounts on office supplies or advertising costs. It might also be worth it to join a trade body to get some meaningful discounts on supplies, utilities or insurance.
Get medieval with bartering
Bartering worked well for thousands of years until that pesky money got in on the act! Hark back to simpler times and swap products for services, or vice versa. You’ll find other SMEs are often willing to do a favor for a fave!
Image Credit: Solutions Africa