8 Cost-Cutting Strategies for Small Business Owners
There are quite a few lists of proverbs when it comes to saving money. They always involve tightening something, whether it be a belt or purse strings. That may be great personal advice, but when it comes time to cut costs for your small business, it is going to take some strategizing. For that, we have our own list of cost-cutting strategies:
Ask for discounts
Talk to companies you do a lot of business with. Remind them of the substantial amount of good services you have purchased. Being a long-standing customer may put you in a position where you can ask for a discount. At the very least, ask if they can match their competitor’s pricing, assuming it is lower.
If the above strategy fails, consider switching vendors. Start with small orders. If their quality, on-time delivery and service are up to snuff, you can begin to increase the size of the orders.
Lower credit card rates
Processing credit card transactions will always result in significant fees. Those fees may have been appropriate when you first opened your account. However, if your sales are higher now, ask your existing merchant account provider about lowering the fees. Again, if the strategy does not work, turn to a competitor. Ask them for their best rates based on your sales volume, type of business and years in business.
Your landlord will not want you to leave if you are a good tenant and your business is in an area where there is a lot of commercial retail space for rent. He or she may be willing to lower your rent. If not permanently, ask for a few months until the tough times have passed.
Companies fail all the time due to losses from internal theft. Often, the culprit is a trusted employee, even a co-owner. You may not want to believe it, but it can be costly to not be alert.
There are also employees who steal your time. Good employers usually avoid firing employees. The best look after their workers and genuinely care for their families’ well-being. Yet, it is the smart employer that weeds out the unproductive workers when times are lean.
Reduce employee hours
This option is worse than the last. Sometimes employees give you their best and you simply cannot afford to give them all the hours they need or want. Try to cut the hours a little each week. Explain what you are doing and hope they understand. Reducing payroll costs is sometimes a necessity.
Marketing & Advertising
Do you track the results of your advertising costs? Campaigns that are not bringing business must be eliminated. Search for low-cost marketing techniques. Look at strategies that work for other businesses. Put them to work for your business.
Make a list of what needs to be done. Estimate the effect each change will have on sales and profits. Then, prioritize that list. This is how you strategically cut costs when your business needs it most.
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