Every business owner knows that one of the most important factors to operating a successful business is managing the bottom line and keeping expenses down. However, when reviewing expenses, small business owners often fixate on the large numbers and overlook the smaller costs that can add up over time. Kick off 2014 with a complete review of your business expenses, and focus on these five areas to save your business money in the coming year:
Conduct a full analysis of your key vendors to determine the areas where you could be saving money. Are your suppliers offering the lowest price in the market? Have you met certain thresholds in the last year that would make you eligible for better pricing? Can you change payment terms based on your payment history in the last year? I made a switch in payroll providers, which led to a 40 percent savings in payroll processing. With 26 payroll periods in a year, the savings really add up!
2. Utility Providers
Have you reviewed your phone, internet, security or electricity bill recently? Are you receiving the lowest rates or paying unnecessary fees? I recently went through the process of reviewing my entire phone and internet bill. I identified two unnecessary monthly charges, discovered a new bundled package at a lower rate, and concluded that I had one too many phone lines. By making these changes, I saved over $25/month -- a small amount that adds up over time. I also recently enrolled in a green energy plan that reduced my monthly electricity bill at my business and at home.
Are you operating as lean and efficiently as possible? Every time an employee leaves your organization, use it as an opportunity to reevaluate your labor and responsibilities. Instead of filling a vacant position, could you reduce headcount by distributing additional responsibilities across current employees? Or, could you take on additional responsibilities that will help to advance your business and save you money at the same time?
Are there administrative or specialized tasks that you are doing in-house that you can outsource for cheaper? Or are you currently outsourcing specialized services that you can find even cheaper with an Internet-based provider? Sites like Fiver, Elance and Design Crowd provide design, web, graphics and even marketing services, starting as low as five dollars a project. Several business owners use virtual assistant services for social media, blog writing, excel work, accounting and most are significantly cheaper than what you would pay someone on your staff to do.
5. Supplies and Equipment
Are you leasing equipment like computers and printers that would be cheaper to own or vice versa? Are you ordering supplies through large retailers that you can find cheaper elsewhere. At Kidville Bethesda, we recently conducted price comparisons of several of our administrative needs, and determined that it was much more cost effective to purchase these products at Costco or by Amazon Prime. Another change, which seems trivial but has added up over time, was the switch from c-fold paper towels to an automatic paper towel roll in our bathrooms. This minor switch has decreased our monthly paper costs, and provided the added benefit of reducing the trash and mess in our bathrooms.
Make it a New Year's resolution to analyze your expenses. And don't overlook those minor expenses, which can add up and save you money over time. When it is your own business, every dollar counts!