In today’s economy every business is looking to cut costs. However before you turn to cutting back on staff, reducing their hours or even laying some off completely, there is another area you should examine first: expenses. Businesses have a number of necessary expenses, of course, but there are some which can easily be reduced, increasing your bottom line and helping your company to stay afloat so you don’t need to take more drastic measures.
Here are 6 areas where your company can likely cut back on expenses without too much pain or effort.
1. Office Space
Renting office space is one of the biggest areas of expense for most businesses. And logically, the bigger the spend, the greater the opportunity to save money. This is certainly true when it comes to office space, and particularly in the current real estate market.
Many areas are experiencing a downturn in terms of commercial real estate, which means there are some great opportunities to get a deal on cheap rent on office space. It is worth checking the market for rental opportunities which are significantly cheaper than what the business is currently paying. In the same way, this is a good time to negotiate with your existing landlord for a better rate.
Vehicles costs are another big cost, as well as being an area where there is often unnecessary spending. Particularly for businesses with service or delivery vehicles, vehicle costs can be astronomical. Analyse the mileage and fuel consumption of company vehicles to check if any savings can be made: by eliminating unnecessary use, you can make significant savings.
New vehicle purchases can also be a great time to cut spending and save some cash. Rather than investing in the biggest, latest models, consider used vehicles which are in great condition. Police auctions are a great place to get a bargain which is still suitable for business use. Also look for greener and more fuel efficient vehicles to save on fuel costs.
3. Waste Disposal
Proper waste disposal is critical for all businesses and organisations, no matter what sector they operate in. Every business generates waste of some kind: whether food waste, laboratory waste, paper waste, or general rubbish. Proper disposal of this waste is essential in order to maintain a safe work environment, protect the health of their employees and ensure that the business is comply with their responsibilities toward the environment.
Although waste disposal is important, it doesn’t have to be expensive. This is an area where many businesses spend more than they have to, because of inefficient waste disposal practices. Having the right equipment in house, such as baler and compactor machines and accessories, can significantly reduce a business’ waste disposal costs.
4. Supply costs
Supply costs are another area where business can be literally throwing away money by failing to use the most economical suppliers. Often this happens when a business has a regular supplier they have used for some time, and is too loyal (or too lazy) to look around for alternatives. However, supply costs are a major budget line, and can vary significantly from one supplier to another, so ignoring this area can be a risky move.
It is important to regularly get quotes for all regular supplies your business uses, and compare them to what you are currently paying. If you find your current supplier is not competitive but don’t really want to stop using them, you can always discuss the issue with them and ask them to give you a reduction in order to hold on to your business.
Businesses commonly pick one insurance policy and stick to it, often without having researched the market and comparing all the options first. This can be a big mistake, as the cost of insurance can vary greatly between providers, so you may be overpaying significantly. As with your other suppliers, be sure to thoroughly and regularly check the market to make sure you have the best deal around.
It is also important to make sure you have the right policy, as this could also lead to your business paying too much for insurance. It is not uncommon for businesses to over-insure or duplicate their coverage, which is a complete waste of money.
Failing to take full advantage of the range of technology available to modern businesses can result in a host of unnecessary expenses. Project management and time-tracking tools such as Asana are extremely useful in managing a team’s workflow and boosting productivity.
Technology can also be very useful in reducing travel expenses by replacing in person meetings with virtual ones instead. Running a paperless office where all documents are stored in the cloud by using a free tool like Google Drive also saves on printing and paper expenses.