Ten Top Ways to Reduce Business Costs

April 25, 2009 by  Filed under: Management 

There is no better time to streamline your business than now. With the global economy faltering you may have noticed a decrease in sales that has not been matched by a decrease in overheads. But this is no reason to worry there are many ways that you can counteract the downward trend. For example the government have introduced many new schemes to help small businesses through these challenging economic times. These incentives could be a lifeline for your business so it is definitely worth investigating all the available angles to see which ones are going to be the most effective for you.

The current global focus on ecologically sound development is also beneficial to your business. There are now a wide range of recycled products and services that are focussed on reducing the cost to the environment whilst the resulting increased competition is reducing costs for businesses. These products combined with the government’s financial incentives to be environmentally friendly are a key way to reduce the costs of business.

It is not just outside sources that will help you through these times; intelligent purchasing combined with a thorough review of the services that you already use can make your business far more efficient so that it can continue to grow whatever the economic climate. For example buying office furniture and equipment is unavoidable expenditure and can be a significant outlay, but if you shop around you will find cheap alternatives without having to sacrifice quality. Auction houses like E-bay are a great place to start alternatively look for companies specialising in refurbished and re-manufactured products. Stopping spending for the office is unlikely to benefit you in the long term partly because creating a well designed and practical office space increases staff productivity and their confidence in your business. What is essential is that you spend in the right places and review as often as possible where you can cut costs and you will find that your business will grow.

Below are ten top ways to simply and effectively reduce business costs

  1. Energy prices have spiralled so switching utility providers may save you a significant amount of money. There are many sites on-line that offer comprehensive comparisons of what is available and you can get special packages designed specifically around your business needs.
  2. Energy conservation is probably the simplest way of reducing overheads. Make sure that lights and other electrical equipment is turned off when not in use. Install energy saving light bulbs. Place electrical equipment on timers, so that it is never on when it doesn’t need to be; this is especially useful for shared equipment like photocopiers.
  3. Buying I.T. Equipment is always a costly exercise. But there are other options such as buying re-manufactured printers. Laserjet are a leading provider of fully warranted, up-to-date re-manufactured printers. The stock primarily comes from demonstration models, factory excess and loaned models. It is returned to good-as-new standard by HP and then sold to you at a discounted price.
  4. Reduce waste, this reduces costs for both purchasing and disposal. Use less packaging, reuse paper/envelopes. Also using electronic communication rather than paper where possible has the added advantage of saving on postage too.
  5. If you need new office furniture then it makes financial sense to get recycled office furniture from a company such as L.A.M. Office Furniture. This company is donated unwanted furniture by businesses which they refurbish and sell on to you at a highly reduced price which can be 80% off the R.R.P. They also offer a free design and space planning service to make the most of your new purchases.
  6. Some energy efficient/renewable materials and products qualify for reduced rates of V.A.T., or can be written off against taxable profit through the Enhanced Capital Allowance Scheme (E.C.A.) in the U.K.. See their website for details on which products are included.
  7. Negotiate with your suppliers for discounts if you pay invoices quickly.
  8. Ask your accountant / lawyer / insurer if they can see any ways that you can reduce your overheads. Sometimes just changing small details, particularly with insurance, can save you a lot of money on your premiums. A fresh perspective may be all that you need to save money.
  9. Use the free national or local government services to evaluate waste/energy consumption or on how to improve your business practice. You can get free consultations and free on-line services through sites like Business Link.
  10. Join your relevant association. You will probably find that they offer a number of incentives to be a member. For example many offer reduced insurance rates or discounts on equipment and specialist products.

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