Financial strength tends to determine how successful a business will be. There are two ways to build that financial muscle. You can work to increase the amount of money coming through the door through marketing and adding products or strategies that drive sales. Another hidden yet effective way to bolster the financial strength of a venture is identifying avenues where money gets out the door unnecessarily. You can save substantial amounts by sealing seemingly trivial leaks. Here are some hidden savings you could find for your business:
Staffing
Human resource, for most businesses, ranks highly on the list of significant expenses. It is up there with rent and leases. An increase in the minimum wage only means a further increase in staffing costs. Staff is the oil that makes businesses run, and it may seem impossible to find savings in this department while keeping things operating optimally. Despite it seeming like a huge undertaking, you can realize impactful savings with a few staff requirement reviews.
One way to achieve that is by adjusting staffing needs based on demand if your industry allows it. Also, using part-time and freelance staff saves money you would have channeled to onboarding, training, and catering for benefits like insurance, social security, and retirement. You make the savings and still work with knowledgeable, hardworking, and experienced individuals.
Tech tools and subscriptions
Expenses relating to software plans and services catch up with businesses. The pesky ‘auto renew’ on subscriptions could be the culprit bleeding your business. Admittedly, some subscriptions are instrumental to the running of your business operations.
However, you do not need to be on the most expensive plan to benefit from the services. Assess the features of subscription services essential for your business and opt for cheaper plans that give you those features.
Also, weed out subscriptions that you do not need or are redundant. For instance, you do not need to subscribe to Dropbox for shared documents if you have Google Drive already.
Supplier costs
Suppliers are instrumental to the smooth running of businesses. However, the costs do add up. It is good practice to assess them periodically to identify areas for savings. Identifying opportunities to outsource production elements also moves the needle substantially. Another way to save is by negotiating with the supply chain vendors.
Do not be afraid to haggle or ask for discounts. It is worth noting that the likelihood of getting them depends on loyalty and the volume of products. Also, shop around. You could be lucky and find another supplier that offers the same products at a cheaper rate.
That way, you can ask your current suppliers to match the more affordable price or change suppliers if the savings are significant enough to make it worth it.
Tax relief and rebates
There is a wide range of tax reliefs, especially if you are a small business. Making the most of that relief will save your business significant amounts. Also, you may be liable for tax rebates if you have overpaid. The best way to know that is by getting an experienced professional to review trade transactions and identify opportunities for duty reimbursement. You might have even overpaid for years without knowing! A duty and tax recovery expert can review your historical entries to identify any refund opportunities.
Energy expenses
Energy prices are constantly rising thanks to the increasing wholesale prices prompting regulators to approve price hikes. The resulting bills are always eating into the profit margins of a business.
A great way to ease the impact is comparing energy plans to identify the best for your business. Audit your usage and rates and scout for a more competitive deal that will not have you spending too much on energy expenses.
Save on rent
Rent makes for a considerable chunk of business expenses. Fortunately, it is an area that has the potential for savings. For one, instead of committing to a long-term office rent space, you could look into other less expensive arrangements. If possible, you could downsize and get a cheaper place. Also, leveraging the now-common work-from-home model could help you save more. Utilizing co-working spaces works too.
Assess ROIs
Not all expenses are worth it in the long run. You need to understand the Return on Investment (ROI) of your business expenses. Assess where your money is going to see if the causes bring value to your business. Understand your balance sheet, profit and loss, and cash flow statements. That way, you can point out the expenses that do not bring a reasonable return on investment and eliminate them or find a way to make them worth the resources you inject.
Wrapping up
Identifying and sealing money leaks may seem like a simple process. That said, the rewards from finding hidden savings for your business may be substantial enough to tip the scales with your profit margins.
