1. Reduce Overtime
Overtime is expensive, but a little preplanning of your work schedules will go a long way here. The feast or famine cycle that many businesses go through can drive costs up without a corresponding increase in sales. The trick is to keep a steady pace with your work, otherwise you find yourself needing to pay overtime simply to keep from missing your deadlines.
2. Create a budget
If you don’t have one, make one. It may seem like a time-consuming project but if your money is important to you, then the results will be more than worth the effort. Simply put, a budget is your most effective tool for setting and reaching your financial targets.
3. Nurture a cost saving culture
Everyone can and should take fiscal responsibility for their work. One way to do this is to involve everyone in the budget. A budget isn’t just a tool for Management. Make all your employees accountable for the line items that affect them. For example, an office administrator may be accountable for keeping your office supplies on target with your budget.
4. Play the “savings game”
Get together a small team of employees and go through your income statement line by line. Your goal is to come up with 3 ideas for saving money for each line item. It will be difficult for some items, but think outside of the box on this. They don’t all have to be keepers. Make it an open brainstorming session and tell your people that no idea is a bad idea. You can prioritize and implement the top 10 ideas once you are done.
5. Negotiate and renegotiate everything
You may be surprised at the results. Nearly everything is negotiable. Even your banking fees are negotiable if you’re doing enough business with them. The trick is to see the transaction from your supplier’s perspective. For example, even if you don’t buy in large batches, you may be able to negotiate a volume discount on materials that you purchase over the course of one year. You’re guaranteeing your business in return for a discount.
6. Decrease your waste
Every company has waste… wasted materials, wasted time, wasted efforts, wasted money, wasted employees and so forth. Make waste the enemy. Everyone in your business must learn to identify it and take steps to eliminate it. You’ll never have a perfectly efficient business, but as long as you are in business that should be your goal.
7. Decrease your inventory
Doing this may require the streamlining of some of your business systems, but if you carry excess inventory simply because you may need it as some point, your savings will be more than worth the effort.
8. Go green
You can reduce your utility expenses by becoming a “power smart” business. Turn off the lights when they’re not needed; automatic switches will help with this. Use energy efficient lighting. Turn the heat and a/c off on weekends and/or evenings. Print only what is necessary. Give your local power company a call for more ideas.
9. Save money through partnering
There are many ways to partner with another company for mutual benefit. One way is to share marketing costs by creating a joint campaign with a complementary business. For example, a real-estate firm might put on a joint seminar with a mortgage broker, or a group of retail stores in the same area might organize and promote a sidewalk sale. If you use your imagination, the possibilities are endless.
10. Reduce your receivables
Your first step is to standardize your approach. It’s easy to develop an effective collections system, it is hard to stick to it. This is because we don’t want to risk offending our customers but you can ask for money without being rude, and, if you’ve fulfilled your part of the bargain it’s fair to expect payment. Be polite, but be direct. You shouldn’t be forced to lend it out against your will for an indefinite period of time (especially if you don’t charge interest or late fees).