Every penny counts in business. Big companies can retrench workers but what about the small business owner; the service provider with a staff of 20 and an office in a suburban service area? What’s this woman supposed to do?
Sacking workers is like shooting yourself in the foot. And besides, in a small business these aren’t faceless employees. They’re friends who have dedicated themselves to building your success. Staff reductions are usually the last thing the small business owner should consider when weighing operational costs.
However, there are things that a small, service or products provider CAN do to cut operating costs.
1. Expand service or product offerings.
Sell more stuff. If you provide a service, let’s say you own an accountancy business, hire a certified financial planner to expand service offerings. Hook in with a legal firm to offer estate planning and will preparation.
If you sell products, contact wholesalers and sell more products, whether it’s cleaning supplies or sunglasses. Add more items to your product line. It’s simple. The more diverse your service or product offerings, the more you see in sales.
A word of caution. Some wholesalers want you to carry stock. Don’t. Your business just captures the order.
How much paper does your office throw out each day? It has two sides. Cut waste paper in to quarters, staple and use to take telephone messages. Indeed, it’s not a huge money saver but, again, in this economy, every penny counts.
Refill copier cartridges. You’ll save a bundle – even hundreds of dollars a year. Those things are expensive!
It also creates a mind set within members of the office staff. Use less. Reuse when possible.
3. Clean your aircon system.
When was the last time you cleaned your heating, ventilation and air conditioning system? Maybe never?
Estimates are that you can cut up to 15% on your power bill simply by tuning up your systems. Get somebody up there cleaning out the air vents.
Side benefit: fewer colds, illnesses and paid absences.
4. Offer benefits in lieu of pay raises.
An extra week’s holiday will make a good employee happy when staff budgets are on the line. A better parking spot will make some people happy. The point is, you can save operational costs by offering better benefits instead of a raise.
More personal leave days. Longer maternity leave. More holidays. These add up to a happy staff that recognises that you’re trying to keep them in place. That you appreciate them. It’s just that money is tight.
5. Promote from within.
This one doesn’t take too much analysis. Who better knows the company cash flow than the bookkeeper who balances the ledger each day? Wouldn’t he make a good financial officer? You bet he would. And there’s no learning curve.
This isn’t a case of giving an employee a fancy-sounding title and that’s it. Delegate responsibility. Show trust in your people and promote from within. You’ll save the cost of a new hire, you’ll have a productive financial officer in place on day one and you’ll boost staff morale.
6. Don’t buy new. Upgrade.
It’ll cost a wad of cash to buy new work stations for a staff of 20. A BIG wad of cash!
Instead, add some RAM chips to speed up an older computer system at 1/5 the cost of a new system. You or your IT whiz can do it. Upgrade monitors instead of buying a whole new system. It’s a lot easier to add a new keyboard, a new monitor, a bigger hard drive than it is to buy a whole new computer so upgrade and save big time. Your business will be technologically current and your staff and systems operating at peak productivity for a lot less money.
7. Use the web to market your business.
No, you’re not looking for business from Panama, but today, search engines are designed for local search. By querying a service with an address, your business shows up with a pushpin in a map and complete contact information courtesy of Google.
Build a small, inexpensive web site and integrate your website into other advertising and marketing. Your web address should appear in newspaper adverts, brochures, business cards, invoices – any paper associated with your business – add on the web site URL.
This is called integrated marketing. The web site serves as THE place to tell the company story and establish your business’ unique selling position or USP. All other collaterals point the reader to the web site.
A web site requires an initial cash outlay, that’s true. Consider it front-loaded promotion. That web site, with pushpin in a map, printable directions and an easy-to-contact telephone number, will pay for itself in new business.
Google “local search” to learn the tricks and tips. Just know that the web is the small business owner’s best friend when it comes to marketing as more and more prospects go there for their service and product needs.
Who wants to drive all over town? This one tip alone will cut your marketing budget in half if you plan smartly.
There are other things you can do: offer loss leaders, move to a smaller office, cut service hours, tele-commute – but all of these, ultimately, hurt your small business.
It’s time to get smart. It’s time to cut your operational costs while keeping your people happy, secure, in place and, most of all, productive.