If you own a small business, you may need to cut your business costs in order to survive the global recession and to protect your business and personal assets for the future. Reducing your business costs at any time will increase your profit margin, and during a recession, it may make the difference between going out of business and fiscal survival.
Offering a good service on the internet to your customers can save your business some costs. Often the labour costs of your small business are the highest regular costs. Providing an interactive internet service means your customers can order products without needing an individual to service the request.
Providing a personalized internet service means you have one customer service representative answering emails and customer queries on the website, which could save your business some labour costs.
Streamlining your business processes and eliminating waste from your business can save you a lot of money. Look at every task your business has and break down each process. If there is any duplication in the process or parts of the process that you can streamline or cut, changing your processes could save your business in many ways.
Every small business needs supplies and services by other businesses. You may be able to cut your costs by bartering for your business needs. For example, you may need to employ a website designer to get your website up and running. If your business offers the website designer free advertising on the website, you may be able to negotiate for a discount.
Use your imagination to see what services or products you can barter in return for the supplies and services your business needs. If you can offer products or services in place of cash for some supplies, you can cut down on your business costs. Restaurants can offer meals for a certain period in exchange for menus, and the printer can offer flyers for the website design for the print shop. You may not always be able to negotiate a straight barter situation, but you can certainly try to negotiate for discounts and reduced costs with your suppliers.
Managing your business cash flow does not have to mean borrowing money from the bank and paying high interest rates. You can factor your income by paying a small fee to a credit company to get immediate payment on outstanding invoices. Instead of offering credit to your customers, you can create a business where customers must pay up front for your products. Customers who order a product via the internet will expect to pay by credit card or a secure internet payment site, such as PayPal. Using these services means your customers pay before you ship the product, so your cash flow is easier to balance.
While it is not advisable to cut out advertising and marketing completely, even during a recession, it is possible to reduce your marketing costs. Internet advertising can be relatively cheap. You can send an email newsletter to your customers instead of paying for printing. Local radio and community newspapers can reach a wide market within a local region for relatively little cost, especially in comparison to advertising in national newspapers or magazines.
If your business ships products across the country and overseas, the freight costs can be exorbitant. Look at how you pack your product. Many cargo and freight companies charge on a volume rate, as well as a weight rate and choose the larger rate for each package. Even if your product is relatively light, you could pay for the volumetric size of your package. If you pack a small product in a large box with lots of packing foam or air envelopes, you could be paying to ship air across the country. Reduce your package size to reduce your packing and freight costs.
You can easily save money and cut your business costs by streamlining your business processes, cutting the costs for supplies, packing, freight, and marketing, and by offering customers internet self service options. Managing your business cash flow can reduce your costs in paying loan repayments.
Small Business Loans for Women
Tips to Improve your Brand Strength
Building Better Business and Customer Service in 2021
What Your Tax Accountant Needs to Prepare Your Income Tax Return
Watch out for Lenders who ask for a Fee Upfront
Stay Alert and Recognize Signs that your Business may be in Trouble
Incentives are Key During Salary Freezes
Online Holiday Sales Expected to Surge by 90% in 2020