My Guide To Cutting Costs That Will Help You Achieve Success
October 6, 2015
In the United Kingdom, there is research to suggest that over eighty percent of new businesses that start in the industry fail. Of course, we define failure by our personal concepts and that slightly distorts the figure. But, let’s say that success, in this case, is selling your company for a big profit like every business owner dreams of when they start out in the industry. That figure of over eighty percent, then, is the realisation and that is the startling truth.
Want to know something that most business owners don’t know when it comes to their startup? Most of them fail because they cannot cut costs, not because they cannot make sales. In your first year, cutting costs is the most important part of your business strategy. As a startup, you need time to grow and hit your target audience. While that is happening, you need an alternative method to help you stay afloat.
In this post, we will be examining the obvious and the not-so-obvious areas of your business that will cut costs dramatically. After all, everyone needs a lifejacket when they are swimming in the industry’s waters.
Option 1: Outsource
Outsourcing jobs is one tool that you cannot afford to optimise in my opinion. From my experience, outsourcing has two very beneficial factors. Firstly, it saves you a hell of a lot of time and money. Menial jobs are called menial jobs for a reason, and it’s because they are boring and monotonous. Unfortunately, they are also incredibly important to your business. However, by the grace of God, there are companies who specialise in areas such as customer service. By paying them to do the job, you have more time to focus on other areas of the company. And, you save money because they often perform the tasks at a lower rate.
Maybe even more importantly, I can also report that they do the job to a higher standard. Just take a minute to think about it and it will all make sense. You, unlike the specialists, don’t have all the time in the world to focus on one job. They, however, have plenty of resources and experience to hit a higher standard of service.
Option 2: Check For Unnecessary Expenses
Over time, we often forget about expenses that are no longer necessary. For example, you might have purchased a subscription to help you get off the ground. But, now that you are in your fifth or sixth month you no longer need the subscription. It is only a little expense, but there will be plenty more that all add up to a substantial amount. The best way to check your expenses with a fine tooth comb is to hire an accountant. I know that the initial expenditure is high, but they will save you a fortune with their knowledge and expertise.
Option 3: Do Your Business Premises Suit Your Needs?
I know what you think because every businessperson has the same thought at the beginning. You think that you want the big offices with your name tattooed across the door, aren’t you? Well, you might want to forget that idea for a while. That image is the end goal, not the beginning goal. Offices like that will cripple your budget, which is why you need to find the perfect premises. Ideally, you need an office that is big enough for now and for the short-term future. Then, as you grow, you can expand at a rate that is ideal for the company. Even if you don’t have everything that you need straight away, there are always options. For example, if there isn’t enough room for all the equipment, you can hire cheap storage nearby. It is a bit more hassle, but a lot less money.
Option 4: Bulk Buy
Bulk buying seems easy because all you have to do is buy a lot of one amenity. Still, you can make the wrong decision and it will end up costing you money. Bulk buying is the perfect way to save money when you buy essential items in bulk. That way, you will save money and they will not go to waste because you always need them. Buy the wrong item and they will sit in the storage unit gathering up dust. In any business environment, stationery like paper is always a good choice.
Option 5: Switch Your Energy Supplier
Now we are getting a little more abstract. Yes, you heard it here first – energy suppliers play a big part in your company’s expenditures. From eight or nine o’clock in the morning until the early evening, your business gobbles up energy. Lights, heating, electrical are all a factor in a massive overheads bill. In fact, the bill can be so big that the first time you see it you might have to look twice. I know countless business owners who never factored overheads into their business plan and suffered. And, it is such an easy problem to solve. Just like you would do at home, ring a rival competitor and ask for a quote. They will be so happy to take business from a rival that they will undercut them just to get you on board.
Option 6: Always Haggle
For most people, haggling is out of the question. I can see where they are coming from in some respects. They don’t want to give anything away and seem desperate when they are negotiating a deal. Potentially, that could scare away clients. However, I would also say they are not doing it properly. Haggling shouldn’t seem desperate, but more like a gentle push to find the middle ground. Every business has a budget and an amount they are willing to spend on a service or investment. Your job is to find that number.
Option 7: Embrace Technology
You will always need employees. But, technology is becoming just as important too. The right program or software can slash your wage bill by a hefty margin. Finding the right balance, therefore, could save you a fortune and make you more efficient.
When it comes to cutting costs, both the big and the small issues make a massive difference, which is why you need to treat them with respect. A lack of respect could mean failure like so many other businesses.