Time to cut costs

Implement Cost Cutting Measures In Your Business

By Andrew Jensen, Business Advisor

Every business from the car manufacturer with 10,000 employees to the salon with only four hair dressers is feeling the pressure caused by an unstable financial future. Profit and production is down. However, energy and utility bills, as well as taxes, are on the rise. Small business owners are also faced with excessive health and liability insurance costs.

In order to survive the recession recovery period, small and large businesses alike must find ways to reduce their utility bills and costs while increasing quality production.

The first place that business owners should look to reduce costs is their utility bills, which are usually designed to confuse the reader. Most owners simply look at the bottom line ( the total due). Most pay their monthly bill without even looking at the specific charges. Doing a thorough audit of all bills (electric, sewage, heat, telephone, internet) every quarter can expose potential errors. You may have charges for services that you do not use. Although these errors may not seem substantial, a $20 mistake each month will cost you $240 each year.

Step back and look at the small places where you can save money. Switch out your current light bulbs for energy efficient ones that use 75% less energy and last up to 10 times longer. Such bulbs also produce 75% less heat. For a large commercial space with multiple lighting fixtures, bulbs that produce less heat will help with cooling costs. Although the price of the energy efficient bulb may be higher than a traditional incandescent bulb, the ultimate energy savings can far offset the initial costs.

Reduce the amount of printing that your office does. If a digital copy exists in a computer file, is there really a need for a print copy? You will save printing costs, as well as storage space. Use the back side of old copies for scrap paper. Use email and fax over traditional U.S. mail whenever possible.

When purchasing office supplies, do a price comparison. You can usually purchase supplies in bulk for a cheaper price. Also, keep track of your supplies. You will ensure that you always have materials on hand. But you will also eliminate the need for extra “runs” to the store.

Consider renegotiating your lease with your landlord. The commercial rental market is also facing challenging times. Your landlord may offer a lower monthly rate or even agree to paying a higher portion of utility costs. Most landlords are willing to negotiate, rather than lose a tenant.

If you are paying for an agency to clean your office every week, consider doing the chores yourself. You could even divide weekly chores amongst your employees. It will only take a small amount of their workday to sweep the carpet or take out the trash. While you may have some complaints at first, most employees are glad to help out rather than take a pay cut or even lose their job.

Conduct a brainstorming meeting with all of your employees. Because they are physically in your everyday business operations, they are more likely to notice places where money is being wasted. They can often offer advice on how to save time and money in the production line. Also, keep an open communication with your employees. Encourage them to share time or money saving ideas with you. Some of the best tips will come from your employees.

Cutting costs is the first thing that employees think of when the economy faces a downturn. Too often cutting costs means lower quality materials, layoffs, or significant pay cuts. However, take the time to evaluate your current business practices and find the small expenses that add up over time.

About Sozo Firm

Sozo Firm helps startup companies, small to mid-sized businesses & nonprofit organizations thrive through developing and implementing business optimization strategies. Our efficiency consulting addresses business processes, customer service, employees, marketing, public relations, and communication. Our internet strategy consulting addresses website usability, reputation management, social media, and internet marketing. Sozo Firm is based out of Stewartstown, Pennsylvania, just a half hour north of Baltimore. Contact our senior consultant, Andrew Jensen, at 800.460.SOZO to learn how we can serve you.