Business is such a balancing act between making and wasting money. Get it wrong and your profits will suffer, you might even end up with losses (which in time will cause bankruptcy). You need to be spending enough for things to run smoothly and end up with a great quality product, but not so much that you’re not breaking even. It’s hard to know where you should be making cutbacks and where scrimping will cause issues, but here are a few areas of your company to take a look at if you feel that you’re overspending.
Outsourcing
Outsourcing is a tricky one, as there are plenty of great benefits to doing so. It requires handing over elements of your business to another company to manage. It means you don’t have to hire additional people on your team, which can save you on recruiting and training costs. You don’t have to buy additional equipment or larger premises for more employees to use, not to mention that the company you outsource to is responsible for their own health and safety, hiring and firing and everything else. This means that it’s completely hassle-free for you, you provide them with the work you need completing and they get it done. However, this does come at a cost.
Sometimes outsourcing can save you money, but other times it’s cheaper to keep processes in-house and hire your own staff. Do Thanks to great business software you don’t need to hire as many employees as in years gone by so the cost of equipment and larger premises needed for lots of workers won’t be as high as you think. Even accounting software will reduce your need to hire lots of accountants since tedious manual methods are no longer used.
Employees
One of the ways you might think of making cutbacks in your business is by keeping employees wages low. However, this is completely counterproductive. Providing a fair wage based on experience is the best way to go, workers are less likely to leave and put you in a position where you’re having to spend money on recruitment and training again. You might keep down the cost of wages, but you will also pay for it with reduced productivity. Your employees are so important, if you want to succeed then you absolutely have to have the right people on board. A good salary and employee benefits give workers a sense of job security, in turn meaning they’re harder working and more productive in your company. Candidates with higher skills and experience will also need to be paid more, otherwise, they could simply go and work for your competitors instead.
Office
There are a couple of ways that your office could be affecting your profits. First, the obvious- you’re paying too much rent. It’s tempting to want to rent a swanky office block with city views and plenty of space, but if it’s out of your budget then your profits are going to suffer. However, on the flip side, if your premises are dingy and uninviting you could be decreasing staff motivation as well as putting off customers and clients. Even excellent workers are only human, and as humans, we’re hugely influenced by our surroundings. Harsh lighting can cause headaches, and lack of natural light can decrease mood. Dingy and dull surroundings can slowly lower morale over time.
Thankfully, there are a few things you can do even if you don’t have the fanciest office. Paint the walls in a light, neutral shade to make space feel bright and airy. Make sure it’s properly lit, have it deep cleaned and add plants which are decorative without being fussy. Your office is so much more than four walls, it’s essentially the ‘brain’ of your business. It needs to be right.
Marketing
Company owners are confused and frustrated when sales are low. When you have a good product that your market research has shown people want, it can have you wondering why the customers’ arent flocking through the door once you open your doors. However, it’s just not that simple. Regardless of what you do or what you sell, there’s fierce competition out there. You need to convince customers to buy from you rather than your competitors, and clever marketing is the way to do this. Marketing can be more expensive than you might think, but it’s absolutely essential for success. Good marketing gets your product to the people that will buy it. Just be sure to stop unauthorized Amazon resellers and any copies of your product or your marketing efforts might just result in people buying these instead.
Economy
Sometimes, uncertainty in business is due to factors that are outside of your control- such as the economy. One huge example of this right now is Brexit, there hasn’t been such economic uncertainty in the UK since the recession, and the nation is on tenterhooks waiting to see exactly how things play out. Even if you’re not in the UK or Europe, there are changes going on in the world revolving around Brexit which could affect you. The best thing you can do as a business owner is to educate yourself on what could happen, and have a backup plan in case things don’t go your way. Use it to your advantage where possible, due to the pound’s value decreasing, overseas investors will be interested in purchasing services and products from the UK with them benefiting more from this trade.
Be sure to hop into the Savvy Entrepreneur Private Facebook Community to collaborate, learn and grow with your fellow entrepreneurs and business owners.
Similar Posts by Savvy Entrepreneur:
10 Income Reports by Entrepreneurs for Entrepreneurs
https://savvyentrepreneur.co/10-income-reports-by-entrepreneurs-for-entrepreneurs/
Get More Customers Using Your Website, Email Marketing, and Social Media
https://savvyentrepreneur.co/get-more-customers-using-website-email-marketing-social-media/
Mastermind Groups for Entrepreneurs Foster Accountability
https://savvyentrepreneur.co/mastermind-groups-for-entrepreneurs-foster-accountability/
This is a Collaborative Post
