Running a business is all about delivering a quality product or service to your customers and putting money in the bank. The rule of thumb is that there are just two ways to increase the amount of money you’re making each month, and those are:
- Lower Costs
- Increase Average Spend Per Customer
Nearly every marketing or business plan has detailed strategies to execute on one or both of these strategies in order to increase the bottom line of your business. Cutting costs is far more efficient and a simpler undertaking for most businesses than trying to acquire new customers. While you should always be attempting to grow, the most immediate savings are going to be made from limiting your out of pocket expenses when the opportunity to do so arises.
Today, I want to take just a few moments to show you three simple ways to lower costs and, in turn, increase your total cash flow each month. These changes aren’t necessarily tricky, and they shouldn’t be outside the realm of possibility for most businesses. The key is action, and the sooner you take action, the faster you’ll see the results.
Go Paperless
Going paperless isn’t just great for the environment, it also saves you a great deal of money each month. We spend money on the paper itself, the storage of old documents and files, postage, and the salary of the person who has to navigate this tangled web of antique information storing. After you remove the need to store files and documents you’d be amazed at just how efficient your business becomes. What normally took an accountant 60 hours to do, might now be done in a third of the time with easy categorization and archival of receipts, tax documents, contracts and the like. In addition, your filing room might now make an additional office or two, or perhaps a conference room, which keeps you from moving into a more expensive space when the need arises.
The upfront expenses required for a new commitment to paperless record keeping is minimal. You can find receipt scanners for just a couple of hundred dollars, and then a program to store them is typically included; you can use your existing file structure, or services like Google Cloud or Evernote make great archival tools.
Repair Your Credit
According to Lexington Law, one of the largest credit repair services in the country, “A bad credit score can cost you hundreds each month in interest payments, or can keep you from getting approved for credit altogether.” As a business owner, this just spells bad news as credit is often an essential part of doing business. From loans to launching a new location, to getting vendors to offer you product or services with favorable terms (or at all), a bad credit score isn’t just costing you in higher interest rates, it may be keeping you from getting the credit you need to grow.
Repairing your credit is typically done on a monthly fee to the credit repair company. This fee will vary depending on just how much negative information you find on your credit report, but the fee is typically pretty nominal in comparison to just how much you’ll save by cleaning it up. The few hundred dollars per month that you spend (or less) is easily made up with just one rather large deal with a vendor by having favorable terms.
Allow Employees to Telecommute
This one might be difficult to see at first glance, but when you dive deeper, you see that numerous studies show telecommuters to be happier, healthier and more productive. While these are great for your employees, it’ll also make you money. Think about the savings, decreased health insurance premiums (healthier employees), more work completed on time (more productive), and increased employee retention (happier) due to the freedom that this position affords them. In addition, you’ll save money on fixed expenses such as utility costs as well as equipment, and even office space. Fewer employees in the office means you can get by with a much smaller (and cheaper) working environment.
Telecommuting essentially costs you nothing to implement. There will be qualitative expenses that are hard to put an actual dollar amount on, but these expenses are nothing more than working out new systems and initiatives that get everyone on the same page and knowing exactly what is required from them while working out of the office. Be sure to set times that they need to be available (if applicable to your business) as well as systems for storing, sharing and presenting files and documents.
Shop Your Fixed Expenses
Most fixed expenses are set in stone, but some things – like insurance, rent, internet, etc. – can often be discounted if you just asked. If you’ve been in your lease for several years and you’ve shown the landlord that you’re a good tenant, it might be time to ask for a discount in your lease – or look for a new location. Internet can often be bundled with other services to save you money, or you could just ask if there are any special promotions running right now that you could take advantage of. Insurance typically changes yearly, so you are often losing money by not shopping your rate with other companies, or asking your agent to re-shop your rate for you.
These steps cost you absolutely nothing, yet the savings is often significant. It never hurts to ask.
If your business changes just these three things (or variations of these three things), you’d be amazed at just how much money you could potentially save each month. None of these items are sweeping changes that involve months of planning or huge upfront costs, they’re simple and easy tasks that any business can employ to save more money and in turn, add additional zeroes to their bottom line.
