Regardless of where you are in your business building process, you’re likely trying to find a way to reduce your expenses and manage costs so that you can see your profit margins grow.
Reducing expenses is a great way to increase your profit margins. Before you can reduce expenses, you have to track your spending. You may not realize that your client lunches and dinners have gotten excessive if you’re not tracking them. Tracking will also show you the categories that your expenses fall into. Once you start paying attention, you’ll likely identify multiple changes you can make.
The following is a list of ways to reduce expenses without affecting client service quality:
- Work from home. Sure, having a great office location downtown or on the water can keep you energized throughout the day but it will also require money to maintain. By working from home with an assistant with the rest of the team members working from their homes, it’s possible to save a minimum of $18,000 per year in office rental space. And that number doesn’t include utilities and other expenses reduced by working from home.
- Reduce overhead by reducing inventory. If you’re an author or have products that can be ordered via print on demand, do it. By not maintaining inventory, you’ll save a lot of money. For instance, keeping home study products in stock would cost a minimum of $24,000. Ordering them only when they have been requested means not wasting money or having to find a way to “move” discontinued products.
- Use recycled ink. As previously mentioned, this one is huge. A combo pack of regular black and color printer ink costs $35 per printer. Recycled ink only costs $20. With multiple printers in the office, that $15 savings per cartridge adds up over the year.
- Go paperless. If you can make your files and documents available to clients as a PDF versus having to put them in the mail, you can save money on both printing and postage.
- Only offer online versions of your products to reduce printing fees. If you are a coach or consultant who creates home study products for clients, only make them available via an online program so that you don’t have any expense to print and fulfill the product. The other obvious benefit is clients get the product automatically as soon as they purchase versus having to wait on the mail.
- Provide virtual offerings to reduce travel expenses. Rather than traveling to meet with a client three states away, offer a webinar, Google hangout or Skype meeting. Using technology to offer virtual options in working with you will not only save you money, it will also help you to leverage technology.
- Use 1099s versus hiring employees. Hiring an employee could mean lots of additional expenses like payroll taxes, health insurance benefits and more. However, bringing on a new 1099 can be much less expensive because there are no hidden costs when hiring them.
- Print on both sides of a sheet of paper. If you’re printing something simply for the sake of reviewing around the office, use both the front and back of the paper. There’s no reason to use more paper than necessary.
- Use online payment services versus a merchant account. Having a PayPal or Square account can reduce expenses if your billing system is able to operate that way. Unfortunately not all businesses can utilize online payment services but if yours can, it’s well worth it.
- Hire interns for college credit. There are not many forms of labor that are going to be cheaper than college credit so if you have work that an intern can do, this will definitely save you money.
- Learn and leverage free marketing tools like social media. There are tons of people growing their businesses via social media which technically only cost you time. If you can accelerate your learning curve and identify key strategies to attract ideal clients, you can make more money and save some at the same time.
What have you done to reduce your expenses? What small concessions have you made to keep your profit margins higher and consistent to your overall business building goals? Asking yourself these questions and following the above tips will save you money and improve your bottom line.
“Business optimization strategist, Darnyelle A. Jervey, is CEO of Incredible One Enterprises, a business consulting and coaching firm that helps entrepreneurs and business owners realize financial and spiritual abundance. Jervey is an award-winning coach, consultant, strategist and a best-selling author with 7 books to her credit, including her latest projects: “Burn the Box: 7 Breakthrough Strategies for Standing Up, Stepping In and Igniting Success” and “Market Like a R.O.C.K. Star.” Jervey may be reached online at www.incredibleoneenterprises.com.
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