Simple ways to boost your bottom line
When you're running a small business, every pound counts. With
the recession still lingering and the economy shaky, saving is more
important than ever. Many small business owners don't realise there
are easy steps they can take to increase their bottom line without
affecting their customers or employees.
Why is it important?
Business owners often get caught up with the day-to-day tasks of
running their company and overlook the simple, easy things they can
do to cut cost and increase profit.
"We know from the tens of thousands of
businesses we talk to every year that the psychology of a small
business owner more often than not is to chase sales and turnover,"
says Jonathan Elliott, managing director of Make It Cheaper, a free
service that helps businesses find the lowest prices on utilities,
insurance and other services. "They are busy trying to win more
business, make more sales and generate more revenue."
In many ways, the easiest way to boost your bottom line is to
cut costs. According to Elliott, every £1 worth of cost savings is
equivalent to £5 or even £10 of new sales revenue.
It is also important to analyse how much you are spending
because costs often creep up on businesses. Most utilities
companies, insurance companies, telephone companies and banks
operate on models that give customers attractive initial offers and
then increase their margins from these companies over the years.
Taking time to review how much you are spending on these services
on a regular basis can guarantee that your business is not paying
more than necessary.
What can your business do?
There are many ways small businesses can cut costs without
impacting their customers or reducing the quality of the product or
service they provide.
"One of the easiest things to do is look at any of the indirect
costs that are not material to the service or product the business
is providing," says Elliott. "Those are costs that can be cut
without receiving any deterioration in the service from the
These costs that are simple to reduce range from stationery and
utilities to insurance and banking. Often business can find better
rates with other suppliers, but you may be able to get a better
deal from your existing supplier.
"Very often we are actually just negotiating a better deal with
their existing supplier without even having to move them," says
How much can you save?
Every year, Make It Cheaper saves small businesses millions of
pounds and they are on a mission to save British businesses £500m
by 2014. Last year, Natalie Langdon from Quinn's Group, a retail
business that sells televisions and sound systems, called Make It
Cheaper to get a better rate on the company's electrical bills. She
was able to save over £500 per year.
Langdon was surprised by how simple the process was. "We
definitely would recommend Make It Cheaper to other businesses and
we plan to use them again ourselves," she says.
It depends on the type of business, but by switching providers
or finding a better plan, it is possible to save 30% on energy,
bills 15% - 20% percent on telephone bills and insurance
without marginalising the service. If businesses use merchant
services so customers can pay with credit or debit cards, the
savings can be as high as 40%.
For more information on how your business can same money and for
a free consultation, click here.
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