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8 Cost-Cutting, Profit-Building Secrets for Your Business

In today’s tight economic climate, it’s crucial for business owners to find ways to reduce business expenses and increase profitability. A healthier margin helps ensure business growth in good times – and survival in bad times. Here are 8 cost-cutting secrets to help you reduce your overhead and increase the bottom line!

1. Clearly identify each of your business costs.
Keep updated records of all bills and receipts. Be aware of what your normal costs are so you can spot anomalies. Keeping track of expenses will also allow you to conduct monthly, quarterly and yearly reviews of your financials, to help you determine the most effective cuts.

2. Maintain tight inventory control.
Careful inventory control can reduce storage and working capital costs. Make sure that adequate security measures are in place to prevent theft.

3. Check invoices against your purchase orders.
NO bill or invoice that your business receives should be taken for granted; overcharges happen all the time. Also, speak to your suppliers about bulk orders and other ways to get vendor discounts.

4. Re-evaluate advertising costs.
Where is your advertising? Are you using too many display ads that don’t bring business, or coupon mailers that don’t seem to work? Keep track of where your customers are coming from and eliminate ineffective advertising cost.

5. Be sure to take ALL of your tax deductions.
Where the tax code permits, you may be able to take deductions for food, cars, housing space used in your business, and more.(consult your tax advisor)

6. Review your insurance coverage.
Insurance is essential, but a review of your current business coverage may reveal areas of over-insurance. Bottom-line: make sure you are only buying coverage that you really need.

7. Control office expenses.
Paper pads, tape, pens and other office supplies have a way of disappearing from the office, increasing re-order costs – don’t let employees take them home. Use toll-free numbers whenever possible, avoid overnight shipping, and use email and faxes instead of paying for postage.

8. Control travel expenses.
Make maximum use of frequent flier miles. Make a deal with a hotel in frequently-visited cities. Rent cars only when necessary. A good travel agent can save you time and money by managing costs and identifying savings for you. Teleconference if possible, or encourage clients to visit you.

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