3 Key Areas for Businesses to Reduce Costs
You’ve worked hard to build your business from the ground up, then you got the funding to get started and now you are possibly looking at what’s next? Great! It’s undeniable that the past year has been tough for businesses of all sizes, no matter how established they were. It’s no surprise that everyone has been looking at ways to reduce costs and generally be smarter with money – whether that’s to save for a rainy day or to keep your business running strong.
In this short post, we’ll cover some of the areas business owners should look into to see where cost savings can be made.
Renegotiate contracts
It’s all too easy to sign a contract and forget about it, but if you’re looking to reduce costs now is the perfect time to review various contracts and see if there are any that you can renegotiate. For example, see if any of your utility suppliers can give you a better deal, even if it’s a one-off agreement. Many utility providers can understand the struggle and some of them can be open to changing prices for a chosen amount of time while difficult times pass, see if that’s something that could help you out.
Look at your gas, electricity, and water bills and see if you can get a better tariff to reduce your costs. If your current providers can’t offer you a better deal, you may want to look at what other providers can offer you and switch to the best one for your business. Yes, you can even choose your water retailer since the opening of the water market to competition in 2008 (Scotland) and 2017 (England) so to save money it might be worth making the switch.
Review usage of resources
After you review your utility suppliers, you may want to cast a wide net here and review other services that your business might be using. That can include raw materials if you’re a manufacturing business for example.
Anything that your business would have to purchase or acquire on a regular basis can be included here. When it comes to reducing costs, even small changes can have a big impact so don’t overlook something that can seem insignificant.
By looking at ways of reducing usage of resources you’ll be able to quickly see the impact on your bills.
Involve your team
As a business owner looking for solutions to reduce costs and keep the business running, it might sometimes feel like you’re alone in this. But you’d be surprised to see how much you could benefit from involving your team in this bill-saving process.
Making any changes in a business is only effective if employees understand the end goal and are involved in the process enough so that they are committed to it.
Staff can also be a great source of ideas and suggestions on where cost savings can be made, as they may see sides of your business that you don’t, so don’t hesitate to brainstorm with everyone.
There are of course many other opportunities to reduce costs, many which will be linked to what type of business you run, but we have only mentioned some of the core areas that should see your business make substantial savings over time.
If you’ve enjoyed this post, we have many other articles covering all aspects of running a business, including advice for entrepreneurs and startups that you may find useful.
