Running a business is bound to be expensive. You’re going to have to invest in all sorts of areas to gain the information you need to sell products, to produce your products, to expand and grow and to generally keep things ticking over, generating sales and profit all the while.
But the good news is that you don’t necessarily have to spend a fortune to have a successful business. Instead, you can focus on cutting costs in unnecessary areas in order to save a little extra money to put aside and to maximise profit margins. Here are just a few different areas you can probably save money on when running a business!
Take a closer look at your manufacturing process
So many businesses lose a whole lot of money by choosing the wrong manufacturing process for their needs. When it comes down to it, there are two main ways of going about manufacturing – you can outsource your manufacturing or you can bring it in-house. Now, if you’re a start up, outsourcing is probably the best way to go. It means that you don’t have to invest in costly equipment and you don’t have to take on permanent members of staff to run the process. It also gives you more room to change your products if items you’ve released for sale haven’t taken off as expected. However, as your business grows and expands and if you settle on a staple product line that doesn’t change drastically, you may actually be better off bringing your manufacturing in-house.
Outsourced manufacturers are always making a profit, meaning they charge more than it actually costs to create the goods. If demand for your products is consistent and stable, you can save the profit margin that you would be paying for outsourced manufacturers and have it available to reinvest into your business or use as your own profits instead.
Use an accountant
All businesses have to pay taxes. But chances are there are some expenses or other deductions that you’re entitled to that you aren’t aware of. By hiring or using an accountant, you can benefit from their in-depth and thorough knowledge of the tax system and they will be able to identify any deductions and savings you could be making. This can significantly reduce the amount you were planning on spending on your tax bill and can make the world of a difference when it comes to savings.
Have accounts in the right currency
If you take orders from international customers or strike deals with international stockists, partners or other collaborators, you may find that you’re regularly stung with conversion charges by your bank when you send and receive money. Instead, why not have a business account with the relevant currency that you can use for these transactions? A USD bank account or a Euro bank account could be a great option! Sure, charges may initially seem small, but the more orders you receive from overseas, or the larger transactions you start processing, the more you’ll lose out.
Question whether certain roles can be outsourced
Of course, you’re going to have to hire staff at some point or another. It would be nigh on impossible for one person to run an expanding and successful business single-handedly. But when it comes down to it, there are certain projects or jobs that don’t require a permanent employee and can instead be carried out by a freelancer or contractor. When you take on permanent members of staff you guarantee them set hours and pay, so you need to make sure that you only hire people who you can provide with the agreed amount of work – otherwise you’ll basically be paying someone to do not a lot.
Question whether people can work remotely
Many businesses like to have all of their staff in one set location where they can be monitored and where they can communicate with each other easily. But running an office can become expensive, as you have to hire and fuel a whole premises. Nowadays, with the introduction of software for communication between remote workers like Microsoft Teams and with the proper implementation of targets and key performance indicators, you can often have a productive workforce working from their own homes. If your staff can work remotely, it could be a simple way to reduce costs.
These are just a few simple ways that you can save a significant amount of money when you’re running a business. So, why not implement them into your routine today?