When you cut down the costs of your company, the business model becomes more efficient and thus competitive. That’s useful, particularly if there are a number of companies in the race vying for the attention of the same consumers. Cutting costs will also allow you to reduce the prices of products or services.
Topics: business, cost cutting
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When you run a business, and yes, we’re referring to any business here, you do need to work to cut down costs.
However, despite the benefits of cutting costs, it’s still crucial that you take the right path to do this. You need to make sure that the approach you take doesn’t actually impact the quality of your service. This would be a terrible mistake. An example of this would be automation.
Automation is a fantastic, modern option for business owners today. Through automation, you can reduce the number of employees that you need on staff. That’s great news right? But, you have to be careful, because customers may notice the lack of employees. Did you know it’s possible to purchase automated content for your website these days? This content is created using software rather than having someone writing it which is great. Think of the time you’ll save. Better yet, think of the money you’ll save! Hang on though, because this also can lead to a serious drop in quality.
While the software is impressive, it’s not quite at the level where it can write compelling articles that speak to the target audience. We haven’t reached that stage yet, and a boring, fairly typical article is probably the best case scenario that you could hope for. There’s always the chance that it creates articles for you that are completely nonsensical.
Does this mean that automation is always bad news? Of course not, but you do need to be careful about which services you use, which you rely on and which ones could impact the reputation of your business. Remember, automated call handling only works if the customer doesn’t end up feeling like one more cog in a big machine.
So, let’s explore some of the best ways to save money in your business model and hopefully avoid the pitfalls of these ideas.
Buying Second Hand Equipment And Technology
Perhaps the best way to save money is to make sure that you don’t have to worry about customers seeing the steps you take at all. Buying second-hand tech is a great way to do this because the tech or equipment that you use will probably be something that is behind the scenes of your company.
Buying second-hand equipment will mean that you can get the right set up for your business at a far lower cost. That’s important in industries where heavy equipment is necessary and even a crucial part of the business model like construction, engineering and logistics.
You can buy everything from full vehicles to second-hand forklifts for sale online. However, you do need to be careful with purchases like this. Ultimately, you need to make sure that you are buying from a reputable source that you can trust to deliver on quality. If you can’t trust in the level of quality that they provide, then you could face a number of issues. First, you might have to replace the equipment with new equipment anyway which will be expensive. Second and perhaps more importantly, you’ll need to think about whether the equipment is even safe. Faulty equipment is a leading cause of accidents in the workplace today. Still, if you find a reputable source that you trust buying second hand can be a great option.
Paper costs a lot of money. You would be amazed how much the average business spends on paper through a year. Spoiler alert, it’s in the high thousands, particularly for bigger companies. That’s why a lot of businesses these days are moving towards a paperless model. There is some debate over whether the paper is even necessary anymore.
After all, it’s true to say that almost everything these days can be handled online, and we even have digital signatures. This calls into question whether there is really any need for hard copies of files. It’s certainly easier, cheaper and yes more efficient to store everything on the cloud server. Don’t forget this also means that everything can be accessed from employees to clients remotely. Due to this, there’s really no need to worry about a change like this negatively impacted your business model. If anything it could dramatically improve it.
Of course, the initial change could cost you money. But it will be a change worth paying for in the long term. When you do this, you need to make sure that your technology and security systems are up to date and effective. If you don’t do this, then you could find that the high levels of data you’ll now be storing online are going to be at risk.
Running It From Home
Certainly, business models can be comfortably run from your home. The benefit here, of course, is that you immediately eliminate a massive expense from your business model. We’re talking about the cost of your business property. Don’t forget, this doesn’t just mean buying the property or even renting it. It refers to everything that comes with that cost as well. For instance, you need to be careful of maintenance bills and of course the cost of energy. There are also more responsibilities to content with when you are running your own business property. For instance, you could end up on the wrong end of a personal injury lawsuit, and this can be a massive expense for any business. While larger companies will be able to front the bills smaller ones won’t be.
So, what business models can effectively be run from home? Almost any online business model will be suitable for a home run business set up. As such, bloggers, ecommerce companies and many more business owner can run things from their home and save a fortune. The only issue to watch out for with this type of setup is keeping things connected. Running your business from home is smart unless you reach the point where you are no longer connected to your business employees and, more importantly, your customers.
You also need to make sure that your business set up still looks impressive. To do this, it’s important that you do target your customer expectations. In other words, you should think about making it look like your business is still run from an office. You can do this with a virtual office address, a virtual mailbox or a virtual number. You should be starting to notice a pattern here. Basically, you can set things up so that you can create the illusion that your business model is far more grand that it might actually be.
Going green has two main advantages. The first is that you’ll be able to save a lot of money which is great news and the second is that you will be able to create a positive publicity spin. It’s true that customers are becoming more and more interested in who is helping to save the planet and who isn’t pulling their weight. Those who do play a part in reducing pollution and carbon emissions could be rewarded with increased sails.
Of course, it’s the cost impact that we’re most interested in, and by going green, you can greatly reduce your costs. There are a number of ways to do this, and the path you take will depend on your budget or rather how much you are willing to spend to save. While this may sound counterproductive certain energy solutions will cost you money. For instance, if you are running a large business, you do need to think in terms of renewable power.
The possibilities here are absolutely endless. We suggest you start thinking about solar power. These panels can be installed on the roof of your business building and will save you a fortune, particularly through the summer months. You may also want to consider making smaller changes as well.
This can include upgrading the tech in your business to equipment that uses less energy and potentially thinking about just switching to LED lights. LEDs use a fraction of the energy compared to typical light bulbs and are fantastic for saving energy while still being a fairly cheap change.
Hiring An Accountant
Finally, there are countless companies on the market today that don’t bother to invest in the services of a trained accountant. Instead, they try and handle financial management of the business themselves, thinking that this is a great cost-cutting decision. Nothing could be further from the truth. Without an accountant you will on average be paying more for taxes and your payroll system will likely be a complete mess as well. This means that you need to be very careful and do not make this decision likely. Remember, you can outsource accounting so that it doesn’t add one more person to pay in your business model.
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