15 Ways to Cut Business Costs

In my experience, a business can save between 50,000 and 5,000,000 rupees a month, without sacrificing its work. I give you 15 ideas on how to spend less and save more on yourself. Let’s agree right away. I give short receptions so that you are not stuck here for a week.

Now take your notebook and pen. Read thoughtfully and jot down ideas! Forward!

  1. Keep a record of expenses

You will be surprised, but sometimes you can cut costs by simply starting to take them into account. Write down every rupee the business spends during the month. Write down all the items of expenditure, then analyze and draw conclusions.

  1. Suppliers

Analyze suppliers constantly, not once a year. Ask for discounts – often you will be given them. Buy in bulk or negotiate joint procurements with other companies. Look for cheaper analogues, without sacrificing quality. Think about how you can switch to your own production.

  1. Salary

We transfer sellers to a percentage. For the rest, we reduce the salary, add a bonus and tie it to the company’s revenue / profit. You can set thresholds below which the RFP cannot fall / rise if you are afraid to immediately switch to a frameless system.

  1. Advertising

Start analyzing the impact of each ad source separately. It is desirable to measure the effect not only of applications / calls, but of sales. Implement analytics. Avoid ads that eat up your budget but don’t waste your time.

Invest 80-90% of your money in what is tested. For creatives and experiments – 10%. Consider if you can work with a barter ad agency. We have worked several times.

  1. Assortment

Perform ABC and XYZ analysis. Take away the slow-moving positions that occupy a place in the warehouse, are rarely sold, and bring little profit. Look for more marginal counterparts.

  1. Customers

ABC and XYZ analysis is applicable to buyers. In any business, there are customers who “eat up” the brain, rarely buy, and pay little. At the same time, managers spend time and effort on them. Save! Use the 80/20 rule. Find 20% of those who make you 80% of the proceeds and direct all your efforts to work with them.

  1. Cost of sales

In addition to working with suppliers, consider automating processes, changing production technology, and purchasing cheaper raw materials. At the same time, the quality should not fall!

  1. Accounts receivable

If possible, switch to postpaid. Allocate a separate person to collect debt, this should not be the seller. All managers do not pay from the shipped goods, but from the money received.

Develop clear rules for working with debtors – there should be a system of reminders, fines, warnings, rewards. Never ship a product / service if the customer has an overdue receivable.

  1. Office needs

With a magnifying glass, consider all expenses – from coffee and cookies to refueling a printer and paying for the Internet. First, evaluate the real need for these expenses. Secondly, evaluate the frequency of repeat purchases (do you have 100 page diplomas printed on your printer). Third, evaluate the market value. Superfluous – cut. We will optimize what is needed.

  1. Staff costs

Introduce a cost request system. Employees should write in writing what they want to spend money on, why and why it costs so much. Consider these applications and pay bills once a week – and bookkeeping is easier, and you are not pulled, and the possibilities for theft have been closed.

  1. Taxes

I will say right away – I am not a great expert. But I have dozens of entrepreneurial acquaintances who have saved millions by switching to a different tax system. The main advice is to work white and do not hesitate to ask the accountant why you pay so much taxes and whether it is possible to pay less using TD bank routing Number.

  1. Liability

For computers, equipment, furniture, and so on. Determine the reasonable life of each item, set aside for depreciation and repair. Stop paying for breakdowns due to the fault of the staff for your own money. By the way, liability will protect you from theft, especially if an employee wants to quit.

  1. Outsourcing

Sometimes it’s cheaper to work with freelancers (advertising, design) or outsourcing firms (lawyers, accountants, couriers) than to keep our own. Look, do you have employees who are really busy only 1-2-3 days a week?

  1. Office / utility bills

Try to negotiate a discount with the tenant – we succeeded. If customers rarely come to you – or don’t come at all, rent a smaller office or a little further from the center. Do not waste money on status and expensive apartments if you have a small company.

Work on reducing utility bills. Install energy-saving lamps. Place motion sensors in areas where light is not used frequently. Water / heat / electricity / gas – all this can be saved not only at home, but also in business.

  1. Offer employees a bonus

If they find a way to save money. Why should you only seek? Your people, and especially for the premium, will find holes in the company where the income flows. Use it!