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Cutting costs is often the most direct route to boosting profits. While you may not be looking to make wholesale changes that could disrupt your day-to-day operations, there may be smaller adjustments that make a big difference. Try these tactics:
You may be able to get a price break from the vendors you use most simply by asking for it. It’s probably in their interest to negotiate with you rather than risk losing your business, particularly if you’ve been a loyal customer. It’s also worth asking your phone service and internet providers what discounts you may be eligible for.
Exploring pricing from other vendors or service providers can be a potent negotiating tactic. Request quotes from multiple vendors or providers, particularly in areas where you aren’t wedded to a specific company. If you’re able to get lower pricing, ask your current vendors to match it.
Though you won’t want to skimp in certain areas, you may be able to save money by buying good-quality used items instead of new. As technology continuously evolves, you might find discounts on computer or other hardware models that were recently replaced.
Good, inexpensive (or even free) alternatives to common software programs are available that could save you money. Examples include LibreOffice for word processing and spreadsheets and Trello for project management. Read reviews before purchasing any program to be sure it’s reputable and has the features you need.
If business picks up and you need to add capacity, consider using independent contractors or temporary workers instead of hiring permanent employees. The true cost of a permanent hire can be upwards of 1.4 times his or her base salary, not including overhead and equipment. Working with freelancers also lets you easily scale back if business slows down.
Offering employees the option to work from home even a couple of times a week can save money on electricity and supplies. It could also improve job satisfaction and make your business more appealing to potential hires. In a 2017 survey by Fractl, a digital marketing company, 80 percent of employees said they would consider a job with work-from-home options over a better-paying job without that option.
Some basic tightening can also be an easy route to cost savings. Evaluate your energy usage: Are lights turned off when rooms aren’t in use? Are heat and air conditioning set to reasonable levels? Review your use of supplies to be sure orders aren’t being duplicated and that you aren’t ordering items you don’t need. Encourage your team to be thoughtful with their supply use — to take what they need, but avoid waste.
Want more tips to help you reduce costs and manage funds more effectively? Check out our online resources or talk with a business banking professional. Call 1-800-428-7463 or stop by your nearest Citizens Bank branch.
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