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If you’re thinking it’s time to trim the fat from your business’ overhead costs, it is. Streamlining overhead enables you to maintain your income, but reduces the price of doing so. Be careful – it’s not as easy as getting rid of employees and switching to generic widgets. That can hurt things more than it helps. Instead, follow these four tips to see your costs fall and profits rise.
Upgrade When Necessary
Now that you’re experienced in running your business, make sure your vendors are meeting your needs as well as you first thought they would. For instance, if you chose the cheapest credit card processing service at the outset, but now you suffer with lackluster customer service and outdated equipment, it may be time to reevaluate your relationship. Consider switching to another credit card processing company such as Capital Processing Network. A higher quality product or service will serve your business better, and this translates to a better bottom line.
Maximize Your Employees
Are your employees making the most of the time they spend at work? Start by assessing each employee’s experience and skills to determine if it syncs up with what you want from them. If you have a great sales associate who gets bogged down with designing sales materials, shift those responsibilities to someone else. A good sales associate should be spending his time selling, not on ancillary tasks.
Beware employee use of social media on company time, too. According to Forbes.com, 64 percent of employees visit non-work related websites every day at work, with socializing on Facebook occupying 41 percent of that figure. Another 37 percent were on LinkedIn. Consider blocking social media sites or implementing a tough policy on employees visiting them.
Use a Scalpel, Not an Ax
Implementing across-the-board cuts is one of the worst things you can do for your small business. Do so, and you risk downgrading your entire operation by forcing employees to do more with less. Instead, cut the fat and leave the meat by focusing your cuts on areas that either aren’t vital or aren’t working. While it may be tempting (and much easier) to slash costs everywhere, it may counter-productive to growing your business.
Similar to upgrading when necessary, look into your vendors’ prices and how you can maximize your customers’ dollar. You’ve worked hard to establish good relationships with your vendors (and your customers), and it may be time to cash in by renegotiating your contracts with them. For example, if your vendor offers a large price break for large stock purchases but that amount isn’t ideal for you, talk to them. You may get a special price break at the level that makes the most sense for you and your business, especially if your vendor fears losing your business altogether.
Cutting costs doesn’t mean downgrading the quality of product or service you offer. It means honestly evaluating how your business runs and implementing new procedures or policies that will make your business more efficient. Ultimately, it paves the way to a better bottom line – and who doesn’t want that?