How do I keep expenses under control in an increasingly expensive business world? This is a common question among small business owners and one which they don’t necessarily ask aloud but is always in the back of their minds.
If you notice your business has stopped growing, then you’ve lost control of the spending boundaries for at least one aspect of your business. Start by renewing your focus on controlling costs at all levels.
Look at renewable contracts with your clients. Multi-year contracts may not be to your advantage. Real time costs are not always taken into consideration and at the time of the original contract you and your client have no idea of which costs will rise in the years ahead during the duration of the contract.
If you carry an inventory, keep in mind that this costs you more. Never keep more stock than you will sell within a short period of time. Even better, don’t carry an inventory at all and purchase only from suppliers when items are needed. Plan ahead for any changes in your market, or products and services you wish to change or improve upon. Compare your costs and expenses with other similar businesses of the same size in your market area.
Never forget to seek out lower prices from your suppliers and to raise your prices as necessary. Raising your prices will not mean you lose customers if the prices are reasonable. Look into anything, especially technology, that will improve delivery of your services. Clients expect the best when it involves completing tasks for them. They like to see creative and innovative ways of getting things done.
Learn accounting. There is no better way to keep track of your costs than to understand them in the first place.
Focusing on the over all cost of your business will show you where you need to rein in costs and where you can spend a little more. Your goal should be to come out ahead while still supplying high quality services and products.
© Chris Draper, DemGen Inc. 2015
