Its all about left over - not turnover!
Running a profitable small business is not always about finding new customers (particularly in the current tough economic climate). Often you can boost profits far more easily by becoming more efficient, introducing automated systems and keeping your expenses under control.
Cost & Efficiency Strategies for SMEs
Boost your profits by looking carefully at your top 5 costs and ask, how can I cut each of these by 10 %. This incremental approach means you can make a difference without trying to achieve the impossible. Then, you do it all over again.
Spend to save - Sometimes you need to spend a little on a new system to significantly increase efficiency and customer satisfaction - like introducing a customer database, stock control system or a better phone system.
Staff CostsUsually one of the main expenses of a small business
Hire v Out-source - Hiring staff is one of the most significant decisions a small business owner can make and it can positively transform a company if you get it right. The down side - it's normally a fixed salary and of course there are holidays, sick leave, maternity, holidays, office space, insurance and taxes to consider - and not all owners are great people managers.
Out-sourcing involves hiring qualified professionals who work remotely for a fraction of the cost of traditional employees. They’ll post their portfolios on sites like AuthenticJobs , Freelancers.net and UPWork, and you can hire them for a set period of time based on your specific needs. there are also many small local companies who can support your administration and accounting needs like Knutsford Admin.
Material & Service CostsTime to go shopping
Ask for a discount - Always start by asking your current supplier for a discount and if they don't know, remind them you are a small business. Then shop around to get comparative quote. There are also UK comparison sites like BusinessComaprison.com that offer energy, insurance, finance and commercial mortgage options.
Collaborate with others - If your supplier suggests you would get much better prices if you bought a little more, then find someone else to pool an order with and you both save.
Finance ChargesIt's just common sense
Credit Cards - With difficulties in raising finance and shrinking overdraft limits many businesses have turned to credit cards to fund their cashflow. Every month hundreds if not thousands of pounds being spent on late payment fees, and expensive interest rates starting around 19% APR. Sometimes a simple schedule of alerts for when card bills are due stops you missing payments and of course you should try to shop around for better rates or see if you can get a government backed small business loan at good commercial rates.
Go GreenSave money and the planet
Energy Saving - I am not suggesting small business owners start hugging trees, but simple things like switching off computers and machinery at night and replacing old light bulbs with modern low energy LED lights just make business sense.
Printed documents - Xerox suggests that 40% of office paper is discarded within 24 hours of being printed. With the extortionate cost of printer ink and laser cartridges combined with filing systems it does not take long to realize that an electronic copy saved to some online storage like DropBox is a huge cost and time saver.