Small cost cuts may not seem like a big deal when carried out on an individual basis, but when smart ways to cut expenditures are implemented throughout the company, substantial gains in cash flow and profitability are achieved.
To help your business save money, we discuss 4 simple but effective strategies.
4 Quick Tips for Your Small Business to Save Money
Encourage Energy Efficiency in the Office
Utilities often make up a significant chunk of the overhead costs. If you can find ways to reduce the energy your office consumes, you will enjoy some significant cuts in expenditures. Putting energy efficient practices in place is an easy way of achieving that.
Heating and cooling is one of the things you can look at. Smart thermostat systems can be installed in offices. These are programmable systems that allow you to cut climate control costs without compromising on comfort.
A programmable thermostat can be customized to suit the requirements of your office and change the temperature to fit the external climatic conditions. So during day times if the temperature is hot outside, the AC can be automatically increase its output. But as the evening approaches, the temperature can be dialed down to provide a cool environment yet cut down on energy consumption.
Reduce Paper Consumption
Going 100 percent paperless may not be practical for all businesses, but a good amount of paper (and hence money) can still be saved by reducing paper consumption.
Reducing paper consumption obviously saves the money your business would have spent on its procurement. Furthermore, you would also be able to reduce your storage costs and increase efficiency by relying on alternatives to paper. Digitizing processes, which were previously done on paper, increases their speed and reduces human errors.
Use Blanket Orders for Consumable Products
Order quantity has an inverse relationship with price. If you order 1000 units of an item from a supplier, it is going to cost you a lot less than if you had order 100 units of the same item. This is basic business mathematics.
However, the issue with ordering in bulk is that it demands an increase in the area and therefore the cost incurred on storage through warehouses. And if the item in demand is a consumable product, then the question of its expiry also comes into play.
The solution to these problems is a blanket order. It is a purchase order that you make with your supplier which contains multiple delivery dates over a period of time.
Buy Generic or Used Items
You don’t always have to purchase expensive brands and new products for use in office. While there will definitely be occasions when you would have to purchase new items, significant cost cuts can be achieved if you implement an organization wide drive to purchase generic and/or used items.
Used versions often cost half (and at times less) of the price of newer items even when they are in perfectly usable conditions. So why don’t you save money for your business and also make a positive impact on the environment by reusing things.