8 common business costs you’re probably spending too much on

Our guide to cutting costs and making your business more profitable

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CALGARY, Alta. April 14, 2017/ Troy Media/ – No matter how long you’ve been in business, cutting costs is always a huge priority for entrepreneurs. No matter which industry your company operates in, keeping expenditure down as often as possible results in better cash flow and more available funds for your business to use when it comes to development and expansion.

But to cut down on business costs, it’s vital to identify the areas where you may be spending more money than you need to. So, here is a list of some common business costs that you may be able to reduce.

Cost #1. Telecommunications

Today, it’s never been more important for your business to have a fully-functioning customer services department. No matter how great your product or service is, without a dedicated customer services team, your business could quickly lose its good reputation.

Running a contact centre can be expensive. However, although the cost itself may be unavoidable, chances are that you’re paying more than you need to when it comes to providing your customers with a top-notch service team.

If you’re not already using VoIP calling technology, then you should seriously consider it – these internet-based calls are much cheaper to run and won’t compromise on the type of service that you offer to your loyal customers. In fact, reputable VoIP calling services can even help to make the whole experience better; many provide call recording software and additional features to help your dedicated customer service representatives improve. For more information, take a peek at this useful Florida telecommunications blog.

Cost #2. Full-time employees

If everyone working for your business is a full-time employee, then it’s worth reconsidering this for the next time you’re hiring. While full-time staff members certainly have their advantages, they also come with the drawback of a fixed salary cost to you each month. When you’re hiring multiple employees, this can quickly add up.

Instead, identify the roles in your business which don’t need to be done in-house or full-time. For example, if you’re on the lookout for an experienced web designer to build and maintain your business website, it will be much more cost-effective to outsource the job to a reputable freelancer or an outside web development company. This way, you’ll only pay for the work that you receive, allowing you to avoid unnecessary expenditure.

In fact, some businesses today run on the power of freelancers alone! Depending on the type of product or service that you offer, there may be no reason to take on full-time staff whatsoever.

Cost #3. Physical store front

With online shopping booming more than ever, there’s never been a better time to ask the question “does my business really need a physical store?”

Of course, in some industries there’s no getting away from the high street; for example, if you offer a service such as hairdressing, you’re going to have to provide somewhere for your clients to meet you in-person.

On the other hand, many companies today find that an e-commerce store is more than enough. If you’re selling clothing, for example, this is one of the top items purchased online today. If you offer a competitive, easy-to-follow returns policy to your customers and don’t rip them off with postage prices, there’s probably no need to commit to the sky-high costs that often come with renting and maintaining a physical retail space.

Cost #4. Delayed or non-payments

While some companies (for example, online stores with instant payment facilities) don’t need to deal with this issue, if your company works in the Business to Business (B2B) industry, chances are you invoice your clients for the products and/or services that you provide them with.

But, here’s the problem: you can’t always count on everybody to pay the full amount within the designated time. Although we’d all like to think that we can trust our clients to be responsible with their payments, you can never guarantee that they will be. Sometimes they might genuinely be unable to afford it, or they could simply forget that a payment is due.

So, cut your invoicing costs by switching to an electronic invoice system. If you’re still sending paper invoices, this can have a huge impact on your cash flow by making it far more difficult for clients to pay. Not only must you both wait for the invoice to arrive in the post, there’s then the hassle of sending a check or logging on to use the details provided to make the payment online. On the other hand, an electronic invoice means no waiting; it’ll turn up in your client’s inbox immediately with a handy link that they can use to pay within seconds.

Cost #5. Physical marketing efforts

With so many competitors out there today just waiting to take your business, investing in stellar marketing efforts has never been so critical for companies of all sizes and industries. But, when it comes to the type of marketing strategies that you choose, you could be making a mistake if you pick mainly offline methods.

While business cards, leaflets, posters and flyers all have their place when it comes to getting the word out about your company, in today’s digital age you could be wasting your money. In fact, some of the best ways to market your business today can cost significantly less; for example, social media marketing, video marketing (you can create videos for free using your smartphone and some creativity!), or even starting a business blog.

Indeed, you can even market your business for free simply by encouraging your customers to say nice things about you online. Be sure that you’re optimized for Google’s Local Search, make sure that your Facebook page reviews are turned on, and get your business set up with a range of third-party review sites where your customers can leave their opinions.

Cost #6. Credit card merchant fees

There’s no getting away from using a credit card merchant today for many businesses; especially if you are selling products or services to your customers online. But, even if you’re selling from a physical storefront, failing to accept popular payment methods such as credit or debit cards will surely put a dent in your reputation.

Credit card merchant services can be expensive; in general, you can expect to pay around three per cent of the total charges in vendor fees alone. On the surface, this may not seem like much to worry about, but with card payments ever growing in popularity, the cost will soon add up.

But, there is hope – since different credit card merchants charge varying fees, you can do your research and shop around to make sure that you’re getting the best price. On the other hand, there are many ways to drive the cost of accepting card payments down; for example, you could offer your customers an attractive discount if they pay with cash instead.

Cost #7. Technology and equipment

It’s pretty much impossible today to run a business without having some sort of technology involved, whether it is something as simple as your own business laptop or a complete server for your company. But, buying technology for your business can come at a huge cost.

So, before you purchase a new technology item or upgrade an existing one, it’s important to ask yourself the question: “can I get this cheaper second-hand?” The answer is usually a resounding “Yes!”. A quick look at sites such as eBay could result in substantial savings; many pre-loved items often have plenty of life left in them.

On the other hand, if you really don’t want to buy something that’s been used before, then you could consider purchasing refurbished technology instead. Contrary to popular belief, refurbished laptops, phones and other electronics tend to be in perfect working order; if something has gone wrong with them in the past, you can be sure that they’ve been restored to their former glory. In fact, many refurbished products have never broken at all; they’ve simply been returned after the box was opened and therefore can’t be sold on for the usual retail price. If in doubt, always buy a product that comes with a warranty for your peace of mind.

Cost #8. Professional services

For many business owners, hiring a professional to look after things such as business books and accounting is essential. However, in many cases, entrepreneurs are paying more than they need to. Whilst hiring an accountant is a much more cost-effective choice than attempting to balance the books yourself with no training or experience, there are many ways to keep the price down.

First, consider hiring an independent contractor who you pay per-job, rather than taking on a full-time accountant or other professional. Second, forging and maintaining a solid relationship with these professionals can often help you to negotiate a lower fee.

To successfully keep business costs down to a minimum, it’s vital to constantly re-evaluate how much you’re spending and where the money is going.

Do you have any ideas you would like to add to this list? Let us know in the comment box below.

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