To increase profits, small business owners often think they need to increase sales, add new product, start a new marketing plan, or work harder. But there’s a different between increasing income and increasing profits. In, How to lower operational costs we look at one significant way to increase profit by attacking the costs of doing business.
There are 3 basic areas: Operations, Facilities and Administration.
How to Lower Operational Costs: Operations
How to Lower Operational Costs: Facilities
How to Lower Operational Costs: Administration
There are many ways to cut or lower the costs of doing business. However, the best way is to ensure you don’t overspend or overbuy in the first place. So here’s a few tips.
- Wait a few days or weeks before you buy.
- Beware the “I might need it later’ syndrome or buying things just because their ‘on sale’.
- Don’t be impulsive, think purchases through.
- Decide if rental is cheaper than buying.
- Remove and dispose of unused items and things cluttering up your work space.
- Don’t fall victim to sales pressures or staying with a supplier just because you’ve been with them a long time.
Before you buy ask yourself 3 questions:
1. Do I really need this?
2. Will it make me more money?
3. How much will it cost me in the long run? (i.e upkeep, utilities, storage, cleaning etc.)
And finally, remember the old adage: A penny saved is a penny earned.