10 ways to save money in your business and make your business a lean mean fighting machine!
In an economic slow-down it is time to cut costs!
When things are going well and saving money is not at the top of the agenda we can all let things slip and not pay close attention to cut costs. With the credit crunch still biting the majority of businesses still I though it would be good to help focus on where money can be saved.
1. Bank charges
If you have been with your bank for a number of years and many people tend to be very loyal to their banks, for some reason. Always remember this, if times get tough, the bank will be the first one to kick you out on the street, as their decision is based purely on a commercial basis without emotion. So it is always good to have a look at the competition and see what deals you can do with other banks and the bank charges you pay or save.
2. Bank loans
You might well have banking finance in the company be it a general loan or overdraft or it might be in the form of a mortgage on a business property. It is always worth while checking to see if you can get a better rate, especially right now with bank base rates being so low. The rate your are already on might not take account of the full rates reduction, so by moving lender you might get a better deal or even a very good fixed-rate deal.
3. Company credit cards
If your business uses credit cards then these will have an associated cost, be it an annual fee or the fee they charged if you use it abroad on business. Check with other banks how much they charge for a similar service, as you might be able to save some money where the cards are used in a significant way.
4. Pay-down your mortgage
Where interest rates have dropped so much your mortgage payments will have dropped by a large percentage. However, if you can afford it, why not keep your mortgage payments at the level they were before so that the capital element of the mortgage gets paid down faster.
In the long-run this will significantly shorten the length of your mortgage and reduce the amount of interest you pay over its term. Also, at a point when rates start to rise again, the amount you owe will be that much lower so the repayments at that point will be lower.
5. Review your supply chain
You might have ordered your stationery from a certain supplier for some time now and it might be that there are other companies out there that offer a better deal. There will be companies eager to get your business and might be willing to give you good account discounts to get your business.
Equally, your existing supplier might well give you a better discount if you ask them and more likely if they know they might loose your account. This saving tip applies to all of your supplies and where you are a manufacturing type business and you purchase goods to sell, then if you can source cheaper suppliers for your business, you will improve your gross profit margins.
6. Cash takings
If you are a cash business you might already try to minimise the amount of the cash you bank and instead use it to pay suppliers, employees and so on. Banks charge you significantly to bank cash so if you can limit how much you pay in this will reduce these costs. You might also want to look at other ways of banking your cash, for example the UK’s Post Office has always been a cheaper solution for banking cash, so it might pay to look around for banks that charge lower “Cash-Banking” rates.
7. Save money on your fuel bills
Even during this economic slow-down the cost of energy has remained relatively high so it would pay you to search around for a better deal. You can normally search online for Energy Comparison Sites so that you can cut your fuel bill on gas and electric. Sometimes by combining the two into one bill and by paying by direct debit will save money – so take time to speak to different companies.
8. Cut your phone bills
For some businesses the phone bill is one of the high costs and by switching supplier can reduce this cost. Look at getting a deal whereby the landlines you use are linked in some way to your company mobile phones so that calls between the office and the mobiles can be free with certain deals on the market. Consider incentivising your employees to switch to your own service provider where call-charges are cheaper when made between the same supplier and the business makes a significant number of calls to employee mobiles.
9. Accountants fees
Accounting and professional fees can be a significant cost to the business and it is always worthwhile reviewing not only the cost of this service, but also whether the accountant you use is saving you money. If you have a good accountant and tax adviser, they should be able to come up with tax-saving tips for your business and if you change the new person might see something that your old accountant has missed.
Also, try looking for an accountant that this prepared to offer a fixed fee – you end up paying too much to accountants or solicitors that charge by the hour, as you are paying for their inefficiencies if you pay them by the hour!
10. Company car policy
Review your company car policy and how often you change your vehicles and for what level of car you buy as a replacement. Also, consider the fuel type your company vehicles use – there are obviously petrol versus diesel and now you have the new types including electric cars and a combination fuel type car.
These are just 10 ways to save money in your business, but if you start to think this way then I am sure that you might well come up with your own ideas to help reduce costs in these difficult times.