Simple ways for small businesses to cut costs

It’s always important for small business owners to keep a close eye on their costs and outgoings, and this becomes even more essential in tough economic times, when the difference between a profit and a loss can be dependent on just how much a small business is reviewing its costs.

First, make the best use of your staff. Don’t just tell them that they have to reduce costs – ask them where they think you’re wasting money and how they’d make savings. This gets them involved in the process of reducing costs and gives them ownership of it. It’s highly likely that they’ll have noticed ways in which the business isn’t operating at peak efficiency, and you can use their creativity and ingenuity to come up with cheaper and simpler solutions to the way you do things. Staff may be worried about job security in times like these, and this can make them feel much more secure about their future if they feel they are part of the business and involved in ensuring its future profitability and security. You could also consider making it a contest, with bonuses for those who manage to reduce costs the most.

Second, look for better deals from your utility providers, and be prepared to switch to make savings. You can get an indication of the sort of savings you can make from visiting comparison and switching websites, but don’t forget that the personal touch is important. Utility companies are facing the pinch too, and they’re desperate to keep business. If you find a better quote for utilities elsewhere, tell your current supplier about it and see if they’ll match it – or even better, beat it with a new quote. It’s worth putting the time into reviewing utility providers and their contracts to see where savings can be made. Even if you’re locked into a contract for a period of time, savings can be made by checking the details of your contract and speaking to your provider about ways you can cut costs and possible get cheaper

Third, look at the amount of space your business is using and consider if it’s possible to reduce that. Many companies are making great savings now by encouraging home-working and hot-desking amongst their staff. This means they need less floor space to work in and can save lots by switching to smaller and cheaper premises. Moving premises or reducing the space you occupy is also a good time to revisit step our second tip and seek a new quote from your utility providers.

All three tips – involving your staff, reviewing your utilities and reducing your space – are easy to implement for most small businesses, yet can lead to major savings that will enhance your profitability in these tough times.