Every business owner is looking to safeguard their earnings and maximize profits. There are two principal ways that a business can do this, one is to increase sales either through more volume or higher profit margins. The other is to drive down their costs. Here are five costs you could save on instantly with a little bit of work.
Unlike social security or Medicare, unemployment insurance claims are not paid out of employee earnings. In the majority of states, employers are responsible for unemployment insurance claims. Each state has different laws over how much an employer contributes, and this can make it difficult to calculate how much you need to pay for each claim. If you use unemployment cost control solutions, you can quickly evaluate and contest claims, which save you money in the long run.
Many businesses still use paper for official documents such as contracts or tax returns. However, even federal agencies are planning to go paperless by 2022. With the average office worker using ten-thousand sheets of printed paper a year, going paperless can be a vast saving. Many electronic signature services offer you the ability to use legally binding electronically signed contracts, making the paper a redundant expense that many businesses can do away with. Getting rid of paper will save you on the cost of maintaining a printer too.
Ditch the Office
2020 was the year for remote working. Now, many businesses have the systems in place to work remotely. If you have not lost any productivity from this new approach to working, ask yourself if the expense of an office is worth it? If you still need a base, consider renting somewhere smaller and using hot desks that allow for more flexible working patterns with employees. Many employees may relish the chance to work a few days from home each week.
Every business experiences shrinkage. Shrinkage is the term used for a loss of stock without payment. This might be through damage or accidentally giving a customer more than they paid for. The best way to reduce shrinkage is to carefully audit your stock and constantly revise systems if you notice common mistakes recurring. If you are a service-based company, think of shrinkage as extra time you spend on a client or a project taking more time than you budgeted for. Again, evaluate any common projects that run over and adjust your costs accordingly
Ditch Traditional Marketing Budgets
Word of mouth brings in five times more sales than traditional print advertising. So why spend all that money getting your name out there when you can harness your existing customer base to become your marketing team. Incentivize them to spread the word by offering discounts for every friend they refer to you. You could offer a points scheme that allows them to build up discounts or offers, depending on the volume of traffic they direct your way.
Finally, remember that if your costs are low, you can either keep that saving for a rainy day, or pass the reduction in costs along to your customers, who may reward you with loyalty.