If you run your own small business, you know that every dollar saved in your business is a dollar in your pocket. Here are six ways you can cut costs that will increase your profit margin.
Some business experts will advise you to outsource as much as possible. It’s a great idea in theory, but many small businesses just don’t have the cash in hand to outsource everything. “There are ways to lighten the load and still get the job done right,” explains Paul Gaspar Director of Small Business, UPS. “You might not be able to hire an agency to handle your marketing, but you could use a private service like your local The UPS Store for specific business needs such as printing, labeling, binding, shipping and more.”
When I had a retail store, I used my local The UPS Store rather than standing in front of a self serve copier for hours. Their prices were competitive with DIY, and the staff always went above and beyond—cutting my flyers at no extra charge, etc. Evaluate each task you do and see where it makes sense, and doesn’t, to outsouce.
Even if you can afford to outsource a task, it might be better not to do so. I recently posted about how not keeping an updated cash flow statement contributed to overspending. I eventually had my accountant teach me basic bookkeeping skills, and was able to trim my accounting fees as well as keep better track of where my money was going. You might consider taking a class in blogging, writing a press release, bookkeeping, sewing—anything relevant to your business.
Look closely at your advertising budget and consider cutting some costs in exchange for finding free advertising opportunities, such as cross promotional partnerships. “Partnering with a business targeting the same audience (but offering a different product or service) can expand your network and open doors for dollars,” explains Paul. He suggests creating a plan to promote each other’s businesses through social media, email newsletters, in store promotions, contesting, and more.
Poor hiring decisions can cost you big in your small business. Depending on your type of business, you might consider hiring employees as temporary or contract workers for a few shifts before deciding to bring them on full time. You’ll get the chance to see how they answer the phone, walk past a shelf that needs tidying or over garbage that needs to be picked up. Do take the time to ensure you understand the regulations around employing temporary employees.
Just because you don’t have a board of directors, doesn’t mean you have to go it alone. Ask a few people whose opinions you respect if you can bounce ideas off of them occasionally. You might appoint someone to be your financial “devil’s advocate” who will challenge you to make a case each time you want to spend cash on advertising, add new products, invest in growing your business, etc.
Whether you’re asking your client for a better cheque by raising your rates or asking a supplier for longer payment terms or a 10% invoice discount, there are deals out there to be had. You just have to ask for them. Your suppliers are vested in your success, and can often help you get a better rate with them by changing your service package or adjusting your orders. This can help you pass on the savings to stay competitive in the market, or simply pocket more profit yourself. When it comes to many business services, such as printing, copying and brokering shipments from the States, connect with a UPS business analyst to help you further at 1-800-PICK-UPS (1-800-742-5877).
Check out our Mompreneurs: Making it Happen section full of tips, tricks and advice from experienced entrepreneurs to help you take your business to the next level. You can even sign up for a 20% discount on all UPS shipping services to help you grow your business.
And you won’t want to miss reading about our inspiring YMC UPS Mompreneurs Contest winners. They may even motivate you to start a business of your own!