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If you operate a small business, then you know how crucial it is to save every penny. With the pressure of running your own business, it can often be easy to overlook areas of wastage and in some cases the drain on your cash flow can get out of hand before you know it.
But don’t despair. Here are some common sense, practical steps that you can take to ensure that you maximise your business performance:
1) Telephone costs.
There are several ways to save money with telephone costs. Firstly, check with your carrier and have them review the usage patterns for your business. Does your current phone plan best suit your patterns of use?
Could savings be made by switching to a more cost effective plan (or even to a different carrier)?
Are you taking advantage of toll free numbers at every opportunity, for example when ordering stock?
Would there be any advantage in switching to an internet based phone system?
How much are staff using your phones for personal calls? While we like to think that it doesn’t happen to excess, the reality is that many business owners lose considerable amounts every month through abuse by staff.
2) Electricity costs.
As with your phone costs, electricity is a major expense to most small business owners.
Air conditioning chews through the power, so make sure that your system is serviced regularly, is set by timer, and where possible, that the control unit is accessible only by you, or by someone you delegate. Staff constantly changing the settings can add significantly to your power costs.
You want your business to look it’s best, so lighting is important. However you should always ensure that lights are switched off in areas where they are not needed (subject to health and safety requirements of course). One way of ensuring this may be to have lights in those areas switched to a sensor system, where they come on when someone enters the room, then switch off automatically when they leave. Energy efficient globes may also provide savings.
Does your office machinery have an energy efficiency rating? Today, many manufacturers of copiers, faxes, printers etc provide an energy efficiency rating, so it may be that you can make savings when you make your next purchase.
3) Postage Costs.
If your business has high postage costs, there are ways to make real savings. Are you regularly mailing out small batches of mail? If so, would you benefit by having less frequent mail outs, but higher volumes in each mail out? Check with your postal service to see if you are eligible for any bulk postage discounts.
Do you send marketing material out separately to invoices? What about sending them out together?
4) Freight costs.
Can you save money by switching to a different carrier? Can you save money by reducing the frequency of deliveries? Would it be more cost efficient to pick up stock yourself?
5) Marketing Costs.
Have you ever really evaluated the return on your marketing dollar? If not, now is the time. You need to survey your clients and ask them how they heard about you. Did they come to you because of that last brochure? Did they hear about you from another customer?
Marketing can be expensive, and costs can vary considerably depending on the type of marketing you use. TV or radio advertising can be expensive, but can reach a wide audience. What return will you receive compared to a mail out?
6) Slow moving stock.
How much is that old stock costing you? It restricts your cash flow and takes up valuable space. If you are an importer/exporter and rely on currency fluctuations, then you need your stock to turnover regularly. Have you considered setting up an online store through eBay? These days it’s not too expensive, and may just be the solution you need.
The author, Dave Curran, has over 25 years management experience, and has also successfully run his own small business for several years. Dave regularly writes on business improvement techniques.
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