Don't let economic pressures sink your business. Here are some top tips to save money for every department in your organization this 2016.
All businesses – whether international or local – need funding to survive.
It’s how business owners pay employees, buy supplies, cover debts, and achieve goals.
If an organization lacks money, it needs to quickly get a hold of the situation so it doesn’t go under water.
Is your accounting department suggesting a tight budget? Looking for alternative methods to cut operation costs?
Make sure your company can endure this year’s ups and downs. Here are various ways to save for every department in your organization: from production to finance.
Save On Purchasing
One of the biggest expenses your business will incur is buying raw materials for your products. A difference in costs could mean profit or loss in the long term. As owner, you want to make sure you’re getting the best deals from your suppliers, and at the same time, that the department is implementing cost-saving strategies.
Aside from substituting more affordable materials where possible, here are other tips to reduce purchasing expenditures:
- Focus on features that customers really want. This means eliminating custom product features that are deemed unnecessary and only add to the good’s overall price. However, you would need to carefully identify what makes customers choose your product above the competition. This allows you and your team to adjust product attributes to satisfy your target market as well as meet your company’s budget.
- Ask about discounts following the supplier’s schedule. Some manufacturers produce materials only during certain times of the year. Letting them deliver supplies during their schedule allows you to cut costs in excess inventory and even negotiate for discounts. This technique works well for businesses that don’t need to stick to a deadline in production.
- Watch out for incredible bargains. If you’re observant, you can buy materials at super low prices from stores that are about to go out of business or are looking to dump surplus inventory. Always be on the lookout for vendors – particularly local ones – who might be more than willing to bargain with you.
Save On Production or Operations
You may have gotten your materials at rock-bottom prices – but it gets trickier to save once they’re in production. But to the resourceful business owner, nothing is impossible. Here’s how to save big in little ways:
- Go green. Believe it or not, minding your carbon footprint not only helps the environment, but also your company’s budget. Simple things such as lowering the thermostat temperature, keeping equipment in good shape, and reducing paper waste are just a few of what you could do to add more cash to your funds.
- Consider cloud technology. Even small businesses can benefit from living on the cloud. From database management, productivity tracking, to something as simple as brainstorming, almost everything can be done seamlessly – and with less costs – online.
- Outsource when possible. You don’t need to outsource the entire production line in order to save money. Try keeping staff to a minimum and then outsource additional tasks that cannot be covered by your regular employees.
Save On Research and Development
If you’re looking to improve products or services in the future, a Research and Development department is necessary for the overall growth of your company. But keeping one in-house could prove to be a big expense. Instead of cutting this section, cut down costs with these tricks:
- Keep the head of the department. If you’re a small business owner but you still want to remain competitive in your industry through constant innovation, keep one person to be in-charge of your R&D department. Unless you need to conduct research all year round, simply hire part-timers for each project.
- Take advantage of government tax incentives for R&D. In the UK, the government provides generous credits to businesses that have some form of research and development. They don’t need to be huge firms in order to claim this benefit. Ask your accountant or a finance expert on R&D tax incentives in your locality for further details.
Related Article: 9 Ways to Save Money on Business Insurance
Save On Marketing
Some businesses, especially startups, like to forego marketing efforts in the hopes of cutting expenditures. But without product or service promotions, how will your company take off? Instead of eliminating the department, save funds by thinking outside the box:
- Try guerilla marketing instead of traditional methods. Billboards and TV ads can take up a huge chunk of your budget. After the event, you’re not even sure how effective it is as today’s consumer behaviors have changed radically. As an alternative, look for cheap guerilla marketing tactics (like graffiti and stickers) that you can easily implement without burning a hole in your pocket.
- Look for sponsors for marketing events. Whether it’s a formal happening to invite investors or a small gathering to thank regular clients, getting sponsors can bring you big savings. Food may be catered by a local company that’s looking for exposure, designs can be shouldered by a partner firm looking to diversify, etc. Use your networks wisely and you’ll certainly reap the rewards financially.
Save On Accounting and Finance
Big or small businesses need an accounting and finance department in order to run smoothly. But if the budget’s tight, how can they keep the firm afloat?
- Take to bartering. Don’t underestimate the power of this age-old technique in cutting costs for products or services that your company needs. For instance: try bartering your consultation expertise for necessary renovations to your office. Not only is this effective in trimming expenses, it can even earn you a new business partner.
- Think about factoring. If your business absolutely needs more funding but you don’t qualify for a bank loan, consider this quick alternative to temporarily cover for expenditures, like buying new equipment. As factoring is NOT a loan, you incur zero debts and avoid going under serious scrutiny from most banks.
Save On Human Resource
Having a solid and well-functioning HR department will ensure that your business takes care of its most valuable asset: its employees. But don’t let this section siphon a huge chunk of your funds. Here’s how to keep HR costs in check:
- Opt for fresh graduates than experienced candidates. Although veteran workers offer valuable insights and experience, they can be expensive and even difficult to manage. Why not give fresh graduates a chance to showcase their talents? They are usually more updated when it comes to industry trends and are more eager to learn.
- Cut employee expenses or workdays. Instead of cutting employees, see what expenditures your business can do without. Do you really need free lunch buffets every Friday? How about that in-house masseuse? Talk to your workers and see how you can compromise. Cutting back on workdays could also save on operation expenses. Instead of working the traditional five days a week routine, see how your employees would like a 4/10 (four days for 10 hours) setup.
Related Article: Earth Day Aspirations: Saving Money While Saving the Environment
Keeping business costs to a minimum is always a challenge, particularly for small local firms. But it doesn’t always have to be. Sometimes, the key is looking at non-conventional ideas or going through non-traditional routes. As long as you weigh the pros and cons, it’s possible to save more and earn big this 2016.