How to Save a Failing Business (part 1)
Cutting costs without cutting employees!
Sales have been down, your profit margin is low and at this point you are reaching into your personal savings to cover payroll. This downturn seems endless and you have to do something to save your business. Professionals who have reached this point think that their next step has to be to cut costs in your business, usually the first cut is staff but it doesn’t have to be. By cutting staff you are ensuring your business to continue on the downturn it is currently on, this is because you’re minimizing productivity and evidently your business can not increase it profit margin with minimal productivity and staff.
Some convince themselves that it is okay, they will re-hire later when their business is improving. But what you have to consider is that your current employee might not stick around and wait for your business to improve. You will then have to re-hire someone new; but there are costs in doing so. It was found that it costs around $4000 to advertise, interview, hire and train a new employee for some businesses. Time and money are lost in the process, and when your business cuts employees they are letting knowledge and useful skills walk out the door. By considering this you can see that it might not be the smartest strategy. So what do you do? You need to save money somewhere. There are many ways to cut costs and keep your employees, and by doing so allowing your business to maintain and/or increase productivity and sales levels. Below are a few examples:
Renegotiated your current plans can result in a lot of money saved in the present and also in the future. Many businesses analyse and renegotiate their plans every 6-12 months, this is because company providers for plans for your internet, phone, credit card and utilities are constantly coming out with better deals to keep their company competitive. By researching the current deals you could get a better offer or discount on your current plan. You can also renegotiate prices for your suppliers or look at other options, search the market as you may find a better deal.
- Eliminate Finance Charges
There are many businesses that spend hundreds and sometimes thousands on unnecessary expenses. These expenses can include late payments on loans, credit card processing fees and membership fees on certain business credit cards. To eliminate these you need to stay on top of your bills and pay them when due. Your business will save a lot of money by doing so and you will also ensure your business has a good credit rating, which is a requirement if future loans are needed.
- Don’t waste time
Time is money in the business world. As a small business owner you will put in a lot of hours but time is still a limited resource. Time management can be the key in producing more sales and keeping productivity levels high, if you don’t personally believe that you manage your time well then look into effective time management techniques and stop procrastination at all costs.
- Cut out Paper
Xerox conducted research which concluded that 40% of office paper is discarded within 24 hours of anyone printing on it. Not only is this bad for the environment but it can create a descent sized hole in your wallet. If you add up the total amount of money you’re spending on printing supplies and paper you can see that using electronic device storage can save you loads of money. This can be done by using Cloud technology in your business, which is an online data storage system. Instead of printing documents for the businesses filing system use the storage system in the cloud to keep all your records and data. More information about Cloud technologies and other technology tools for your business can be found via this link; http://www.business2sell.com/blogs/2014/05/why-is-technology-the-future-for-small-busine.php
- Energy Efficient Appliances
Energy price increases are really taking a toll on people’s wallets. Most homeowners spend time and effort saving energy in their home, so why shouldn’t you do the same with your businesses office. The most effective way to reduce your utility bill totals is to use energy- efficient appliances. To be specific the Energy Star Label you may see on appliances shows that this appliance is the highest quality in energy efficiency; it also means that for appliances like dishwashers it uses the least amount of water for the same outcome. You can also use energy efficient light bulbs throughout your office. More information on energy efficiency for commercial properties can be found via this link; http://www.commercialproperty2sell.com.au/blog/2014/05/why-should-your-commercial-property-be-energy.php
By making your office energy efficient you can save a lot of money in the long run. You can take the first step by requesting a free energy audit from your power company. An inspector will provide an assessment of your place of business and further recommend ways to reduce your energy bills.
Overall the benefits of saving money even when your company isn’t struggling can aid in the success and further improvement of your business. Save money, and continue to succeed. Good luck.
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