Cutting Cost and Streamlining to Increase Profit
As a small business owner, it is important that you understand the importance of cutting business costs as well as personal costs if you are to maximize your profit margins and grow your business. This is just as important as increasing topline revenue and revenue collection. So how can you cut costs and streamline revenue?
In order to spend the money appropriately, it is critical to have a budget. A budget will ensure you allocate a certain amount of money to a particular cost and it gives you the discipline to know that you can only for instance; spend $1,000 on a particular expenditure and nothing more. It also gives you an overview of how much you spend on certain things and you know exactly where to cut in order to increase profits. The best software hands down to use to help you with budgeting and managing finances is Quickbooks.
Special Offer: After you download Quickbooks, contact our backoffice for FREE Quickbooks assistance and helpful tips to customize and setup your system for your business.
- Pay debt on time
Another great way to cut your business cost is to pay debt on time. When allocating money to various costs in your budget, ensure you pay off your debts. This will ensure that you are not charged penalties and the interest cost is not continually increasing. (Did you know that regular APR interest compounds itself?) By paying off your debt frequently and in a timely manner, it will increase your credit score.
Tip: Don’t forget to write off all interests and fees on your taxes!
The next best way to cut cost is to streamline and automate some routine tasks. This will not only reduce labor but also material costs. For instance, instead of having an employee who manually backs up your business data, you can use a cloud service to back up automatically, securely and cheaply. For a small business owner, we recommend starting out with WD My Cloud EX2 Network Attached Storage. As your business grows, Western Digital provides business solution software that can grow with your business.
- Reward employees
You can change how you reward your employees. While employees are always looking for a pay raise or a bonus, they equally love value adds. For example, instead of a pay raise, you can offer flexible work hours. This will save you money and you will still have happy employees.
- Payment Options
To streamline increased revenue, it is important that you consider introducing more payment options. You can use credit card processing services, merchant account services, and other solutions meant to make it easy for you to receive payments from customers anywhere anytime. For instance, you could accept payments online or have credit card POS systems (including mobile payment solutions) set up in your physical store to make it easy to accept payment even while on the go. (Read more about accepting credit cards on our blog.)
As you grow your business, it is critical to find new ways of cutting costs so that the costs don’t eat into your revenues and you end up with lesser profits. Share your success stories with us! As always, if you have any questions, feel free to contact us below.