Business
Five Ways to Cut your Business Operational Expenses
If you feel like your business expenses are spiralling out of control, it might be time to take a step back and complete a financial review. You create a personal budget and financial plan to make your investments work for you, so why would you treat your business differently? Below you can find five areas you can improve to reduce your operational expenses, improve your profitability, and manage your cash flow better.
Compare Business Property Costs
Renting your business premises will be the single greatest regular expense you will have to manage. You need to review your choice regularly, to see if it is worth to pay the rent, and whether or not the location still serves your business needs. You can look on commercial property websites, or check with estate agents to see if you can pay less rent and business rates elsewhere, and benefit from more foot traffic.
Review Your Taxation
You have to make sure that your incorporation form serves your business long term. If you started as a sole trader, and you now have employees and premises, maybe multiple locations, you might want to change your business form, and take advantage of the different investment tax rebates offered by the government. Talk to a tax consultant to find the right business type for maximizing your profits.
Improve Your Supply Chain
You might have faced increased supplier costs, or your shipping expenses rose significantly. If this is the case, it might be time to look at your supply chain, and determine where you can make improvements. It is a good idea to talk to a professional Supply Chain Consultant who can help you identify and address the development areas.
Automate Processes
Some processes can now be automated in your business. You don’t have to visit clients at their offices, unless you offer personal consultation, and can collaborate with them using cloud technology. This will leave you time and cut your travel costs long term. Likewise, you might want to invest in an accounting software that will automatically report your earnings and expenses, and give you a real time snapshot of your financial situation, instead of paying a business accountant every month to do the same.
Reduce Overhead an Outsource
If you cannot effectively utilize your workforce, or need more flexibility, you might want to offer a different type of contract, so you have workforce when you need them, or cut your overhead and outsource some processes. You might want someone to cover your online customer service from home, as a virtual assistant, instead of paying a full time office worker to do the same job. Employing flexible contractors has several potential benefits.
When you feel like your expenses are constantly increasing, you need to look at areas where you can save money and make your company more efficient and profitable. The more cash you have left, the more you can reinvest in your business, and the less credit you have to use to make continuous improvements.
