There’s never an easy time to be in business but now seems to be an especially difficult period. In one recent study, 12% of small business owners said they didn’t think they’d be in business one year into the future; a further 15% said that they were unsure about their future.
When times are tough, it’s important that businesses find ways to improve their bottom line. The best way to do that is to get more customers and make more sales, but that’s not the only method. We’ll run through a few effective strategies below.
Decrease Spending
Making more sales is the best sign that a business is on the right track. But in terms of purely helping to improve the bottom line, decreasing spending will have the same impact. Saving $5,000 is the same as earning $5,000 when it comes to fiscal calculations, after all.
If your expenses have become bloated in the past couple of years, now’s the perfect time to take a look to see where you may be able to cut down on costs. One good area to start with is with the software subscriptions at your organization. There may be cheaper or free options available, or single packages that provide the same features as the five SaaS subscriptions you have.
Selling Equipment and Other Products
Most businesses are valuable, it’s just that most of that value is tied up in equipment and commercial premises. One way to boost your bottom line is to sell equipment that’s no longer needed. Alternatively, if the machinery has come to the end of its life, then you may be able to sell it to a metal recycling company, which will both bring in additional revenue and help to improve your organization’s eco-friendly credentials. If you bought heavy machinery that’s still valuable, you can also consider selling it to another business and then using rented equipment, which is much cheaper, as a replacement.
Invest in Employee Retention
It takes a lot of money to find, hire, and train a new employee. According to one estimate, the average cost of bringing a member of staff on board is more than $4,500. If it’s done correctly, then that will be money well spent, since it’ll allow you to push your business forward. However, if the employee leaves, then it’ll be a waste of money — and you’ll need to spend that amount again to find a replacement. While not free, investing in your employees’ well-being and happiness can make a real difference to your bottom line. Not only will you avoid additional hiring fees, but you’ll also benefit from productivity improvements.
Increase Prices
Finally, one effective way to improve your bottom line is to raise prices. Many businesses are reluctant to do this because they believe they’ll lose customers, but if done correctly it will work. The main thing is to not raise your prices too much. As well as helping improve your finances, it can also help with brand perception — remember, cheap can often be a synonym for low quality.
