Negotiate when possible Some costs can be perpetually lowered by negotiating discounts with companies you buy from. Costs for goods and service make up 28 per cent of a small business” budget. This is the second highest expenditure after payroll and although businesses are often hesitant to ask suppliers for deals, many B2B companies expect customers to ask for lower rates. Often when a supplier knows you’re pursuing other options, they are more likely to offer the best possible deal and creating some healthy competition amongst vendors is a good way to reduce costs.
Know when to delegate or split resource There are projects and tasks that require small businesses to divide their resources. It can be a real challenge to decide which ideas to prioritise and how to delegate amongst your team. Some projects return higher profits than others, so it’s imperative to leverage these by tracking their outcomes and future expenses. A good way to manage a project budget is through a resource management software solution which can provide you with a complete overview of your company’s budget and expenses. Working out approximate costs between projects will enable you to see which tasks have the highest effectiveness at a lower cost and give you clarity as to where best to invest resource.
Establish business benefits plans Of course, every business owner wants their employees to feel valued. Leveraging pre-tax and discounted tax savings for you and your employees through flexible benefit plans can help reduce your payroll taxes, increase your employees” spendable income and ensure compliance with business provisions and regulations. A good benefits scheme is also a major incentive for an employee to choose to work for you. Finding ways to save on benefit costs means you not only keep within budget constraints, but you also keep your staff happy as well. While small businesses don’t always have the deep pockets of bigger institutions, it doesn’t mean you can’t flourish or achieve the same level of success. Careful decision making means reduced costs and driving larger profits while fostering sturdy foundations for the future. If you are creative and capitalise on more efficient technology and marketing channels, you can rapidly elevate your business above competitors and even larger corporations using obsolete methods. Jessie Avery has written this for insurance firm Colonial Life
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