Increasing your prices is not the only way to increase profits in your business - cutting operating costs can also help keep costs down. Here’s some ideas from our advisory team on how to keep more money in your pocket:
- Cut utility costs: Wherever possible, wind back the use of gas and electricity. Would renewable energy work for you? Can you install a solar system or other passive energy source that will save money in the long run? Turn equipment off when not in use, particularly after hours. Use LED lights wherever possible.
- Economy of scale: Save money on travel expenses by doing several jobs in the one area/suburb/region. This can be achieved through targeted marketing efforts and strategic scheduling.
- Tax minimisation: Surround yourself with experts including a knowledgeable accountant who can guide you on all the tax deductions your business is entitled to.
- Don’t cut your prices: Offering products or services too cheaply won’t lead to more profits down the track. Make sure your prices cover all costs and allow for profit.
- Chase overdue debts: Cash flow is king for small business. Be brave when asking for overdue payments to be made. If a customer is a regular late payer, it may be time to offload them completely.
- Cut overheads: Check your lease agreement for opportunities to negotiate for a smaller space or lower outgoings. Revisit bank loan contracts and insurance policies to see where reductions can be made. Look for the best deals you can get on insurance and bank interest rates.
- Upskill in the down-time: If business is a bit slow, don’t sit around doing nothing - upskill your employees and yourself. We offer a suite of low-cost, effective workshops covering a range of small business topics; online marketing, understanding financial statements and how to write a business plan.