The week of Thanksgiving is here. It's a time for giving thanks. And it's also a great time for business owners to take a critical view of their business costs to prepare for the coming new year. We know that cutting expenses is never pleasant. But there are some ways to tackle cost cutting without affecting day-to-day operations. Consider the following advice on these less aggressive, less invasive measures:
1. Get Creative With Your Hiring
Consider outsourcing work to independent contractors and interns when necessary. As long as you're willing to provide some guidance and leeway, both are sources of low-cost labor. Just make sure you know the rules. Pay interns if they're completing any actual work for the business (as opposed to just learning), and independent contractors must meet a list of determining factors. Also, just letting your employees telecommute can cut down on office-related expenses.
2. Negotiate With Your Vendors
Building a relationship with a vendor takes time. When you first start, you may get their worst available rates. It's nothing personal, they just don't know you yet. But the end of the year is the perfect time to call upon your vendor to negotiate new rates. After a little research on the actual costs of the products, send your vendor a pitch. The worst thing that can happen is they say no!
3. Remove Redundancy
Redundancy happens. Business is messy. As a company evolves, positions can overlap. You may also find that your equipment can also become redundant. Look for opportunities to streamline your company's equipment, inventory, operations, and people as you prepare for next year.
4. Go Green to Save Green
“Going green” has a bad reputation for being expensive, but it doesn't have to be. There are many ways to reduce energy and utility expenditures. Consider replacing any inefficient appliances and switching to CFL or LED lights. Ask your employees to power down their equipment before leaving for the day. These small changes can have a significant impact on your monthly utility bills.
5. Cut Your Consumables
The cost for office supplies (e.g., paper, ink, pens, toner, file folders, tape) can be considerable each month. Just by going digital, many of these items can be eliminated. Likewise, consider ditching the water cooler expense by installing filters in your sinks or using filtered pitchers. You can also encourage staff members to bring in reusable plates and cups rather than buying paper products.
Reflecting on what your office actually needs can help cut costs. But it doesn't have to be a painful experience. We find it works best to separate your expenses into three areas: 1) unnecessary, 2) not necessary but convenient, and 3) necessary. Once you have your list, cut your unnecessary expenses. Then turn to your convenient expenses if needed to achieve your cost cutting goals. You should be able to leave your necessary expenses in place with these methods and still reduce expenses. With a little work now, you can enter the new year in a much stronger financial position.
Virtual BeanCounters serves entrepreneurs with an empowering finance division so they can focus on innovation and creating value for their clients. We believe you can accomplish the business of your dreams a lot easier with a professional accountant on your team! Contact us by phone at (913) 649-1040, or click here to visit our Contact page.