All small business owners need to cut costs and boost profits. As the U.S. economy slows down, small businesses can face rising fuel costs, fewer customers and falling revenue. This presents new financial challenges for both start-up and established entrepreneurs. Spending wisely on routine expenses can help make other areas of operations become more cost-effective.
Business owners can take a number of steps that will help them cut costs and boost profits. SCORE “Counselors to America’s Small Business” offers tips on how small businesses can save money and help them to cut costs and boost profits.
# Check your operational expenses on a regular basis. If you analyze your profitability once a month, you may want to do it weekly or biweekly. Review your business plan more often. Monthly or quarterly reviews will make it easier to make adjustments. This will help you cut costs and boost profits.
# Monitor energy consumption at your business. Track and cut any wasteful usage. Install auto-setback thermostats and automatic light switches. The savings can be dramatic.
# Plan your driving route and avoid rush hour. Take care of several errands on one trip, so you don’t put extra miles on your vehicle and burn fuel needlessly. Schedule appointments in late morning or early afternoon, when traffic is lightest.
# Think of your inventory as company cash sitting on a shelf or in a warehouse doing nothing. Costs include storage, insurance and taxes, among others. Keep good records and regularly discard low-selling items.
Examine Your Service Options
# Realize that express shipments for next morning delivery are costly. Consider next afternoon or two- or three-day service.
# Review vendor relationships at least annually. These include Internet services, phone, wireless, DSL, shipping, legal, printing and other day to day expenses. Prices and package deals change and you may be overpaying.
More on how to Cut Costs and Boost Profits
Many SCORE counselors have experience with how to cut costs, increase sales and handle an economic downturn, and they are willing to share their knowledge. Visit www.score.org and click on “Find SCORE Now” to locate the nearest SCORE office using SCORE’s new mapping tool. Get answers to your questions via email by clicking on “Ask SCORE.”
Since 1964, SCORE “Counselors to America’s Small Business” has helped more than 8 million aspiring entrepreneurs and small business owners through counseling and business workshops. More than 10,500 volunteer business counselors in 389 chapters serve their communities through entrepreneur education dedicated to the formation, growth and success of small businesses.