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Roy Butler MP Member for Barwon

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Running a Small Business: How to Reduce Outgoings and Boost Profits

Published on Wednesday, April 29, 2020

Running a Small Business: How to Reduce Outgoings and Boost Profits

Do you run a small business?

 

Among all the challenges of a small business, perhaps the most important to overcome is that of cash flow. Some business owners seek real guidance from those who have survived a similar situation and have experienced big business success in the end.”

 

Money tips for small businesses can help you thrive in today's tough economy.

 

These tips represent real ideas to help you lower your overheads and cut your costs while still reaching your target consumer base and growing your business.

 

So if you’re ready to reduce your outgoings and increase your profits, here’s what you need to know.

 

1. Outsource

 

Yes, you need employees to get work done, but the cost of hiring, retaining and accommodating in-house staff can often be the biggest operational expense for a small business. 

 

In some cladding and carpentry firms, they opt to keep the number of full-time employees to a minimum and outsource extra work to independent contractors as and when required. 

 

Not only can they use independent contractors when required, but those external contractors bring beneficial varied experience and industry expertise to the business. This passes on the value to the customers while helping keep overheads lower.

 

2. Embrace the Cloud

 

You will often see frugal marketing gurus advising businesses to embrace cloud-based solutions before even hearing the issues a business is dealing with. However, real small business owners now also often recommend availing on cloud-based solutions. In fact, 83% of enterprise workloads will be in the cloud by 2020.

 

Some small business owners have streamlined their business process with cloud software. 

 

They spend a lot of time physically assigning their work and there were often miscommunications or human error. By putting their workflows onto the cloud, there is zero confusion about responsibilities. Hence, they are able to put their full energy into their work.

 

Cloud-based software like PayCycle, Staffmate, and Salesforce can allow businesses to pay on an annual user number basis rather than having to purchase expensive annual commercial software licenses.

 

 

3. Utilise Telecommuting

 

 

While telecommuting is not practical for all types of businesses, or even all employees within specific businesses, when it is practical, it can be a massive money saver. 

 

Finance analysts at Max Funding say, “by keeping everything virtual, small businesses can avoid the cost of renting office space and focus more resources on producing work with minimum overheads.” They suggest, “if you can't envision turning your entire existing workforce into telecommuters, at least try to find a way to enable some employees to work via telecommuting interfaces.”

 

4. Go Green

 

Going green is more than an excellent PR move; it can also be a wise financial move. 

 

Since the goal of environmental friendly practices is to save energy, and energy bills can be a large monthly expense for businesses, going green can save a business a lot of money.

 

Some small business owners have realised the positive impact that going green can have on cost. 

 

For instance, when completing kitchen renovations, you use a lot more power and create more waste than you realise. By making small changes like consciously minimising the waste, you spend less on your orders and save money for other aspects of the business.”

 

5. Implement Integrated Business Systems

 

The main benefit of implementing integrated business systems is significantly improved visibility. The importance of real-time visibility for making timely informed decisions should never be underestimated. 

 

When business data can be viewed instantly, from any location, without the need to waste resources on data collection, extraction and combining, employees become better informed and able to make faster, more accurate decisions. 

 

Another benefit of implementing integrated business systems is that you'll see dramatic IT cost and time savings. You will no longer need to procure, install and maintain numerous systems on IT equipment and setup integration between the systems. 

 

As a result, there will be a dramatic reduction in operational costs and the time previously spent on multiple IT systems can be redirected to other areas of the business.

 

 

6. Research and Analyse

 

 

When you start using research and analysis techniques like data mining, you'll notice improved customer service. Data mining can also boost customer satisfaction ratings, as it enables logistics managers to select the best shipping methods, choose the best carriers, prevent delays, limit damage and, therefore, provide a better service. 

 

Granting customers access to various data, such as PO information and real-time tracking, allows them to see where their packages are in the system and improve their own inventory management. 

 

Increased visibility of shipment progress allows for greater understanding of stock levels and aids with budgeting during peak and off-season periods. If businesses can see and act on data, customer satisfaction is sure to increase, as goods will have increased likelihood of arriving undamaged and on time.

 

The second benefit of data mining is cost reduction. Having access to real-time information rather than historical data is essential. 

 

Access to real-time data about your supply chain enables you to create transportation benchmarks, plan loads, optimize routes, and as a consequence, discover ways to reduce shipping costs. 

 

By using services such as Small Apps, you can manage and automate all kinds of data leaving more time for you to spend on your clients.

 

Data collected provides managers with a focal point of reference that allows them to make well-informed decisions, leading to increased cost-effectiveness in the supply chain.

 

Now that you’ve got a few of the tips to save money for your small business, it’s up to you to start implementing them so you can benefit from these cost saving secrets. 

 

So, what are the areas you can focus on to start saving money for your small business today?


 

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