It’s difficult to run a profitable business when your bottom line is eating away your extra revenue. Small businesses, in particular, have their work cut out for them. They require hefty labor and office costs, as well as marketing and digital tools to keep things running smoothly, but their profits don’t always cover those costs.
You will always have to spend money to make money. As your business grows, your bottom line will also naturally grow. However, you don’t have to spend unnecessarily. Too often, businesses mistake a growing bottom line for a growing company when the real problem is unnecessary overspending.
It’s always important to evaluate the return on investment for every dollar spent. If things aren’t adding up correctly, you can significantly reduce your bottom line and make more room for profit.
Monitor Utility Usage in the Office
It’s expensive to power an office. You have to maintain a comfortable temperature. Plus, lights, computers, and other equipment use a lot of electricity. You can easily spend more than $1,000 a month on utilities for a small, 2,500 square foot office.
There are ways you can cut back, however. In the summer when your AC is running full blast, try to stimulate better airflow and avoid overworking your air conditioner. Put lights on a timer. Use zero-energy lights to minimize cost as well. These are simple measures that can cut your monthly utility bill in half.
Reduce Paper Use
Despite efforts to go paperless, the amount of paper used in an office is actually growing by 20 percent each year. The average office worker uses about 10,000 sheets of paper each year, even though a large portion of their paper documents are also scanned and saved digitally. Overall, paper and printing costs can amount to thousands per year for small businesses.
Therefore, you should implement more paper-saving measures. Use cloud and digital scanning services, rather than hard copies. Collect email addresses and limit using regular mail. Create strong digital ad campaigns rather than using print advertising services. These little changes will save you hundreds in the long run.
Relocate to a More Affordable Area
Depending on the type of business you run, you might be able to move your office to a more affordable neighborhood. If you aren’t dependant on things like highway access and high foot traffic, there’s no need to keep your office front and center. Finding a more affordable office space shouldn’t be too difficult, especially if you live in a larger city.
Eliminate the Office Altogether
With the advent of technology, more and more companies are turning to remote work. Rather than paying for a large office space, employees work from home and meet together in digital conference rooms or through productivity software to stay on the same page.
This may not apply to every business, especially if you depend on client meetings or you’re a retail store. Still, if your business can be cloud-based, the office space might be obsolete and not worth the cost.
Keep Employees Healthy and Happy
Worker illness, injury, and absenteeism costs American employers more than $225.8 billion every year, or $1,685 per employee. Sometimes illness is unavoidable, but sometimes it’s the product of a poor office environment. Stress, depression, back and neck injuries, and other workplace related illnesses are among the largest reasons for office absenteeism.
Employers can prevent many of these problems with certain health and comfort initiatives. You might offer a gym discount, include a fun-filled break room, have bagel Fridays, and make work schedules a little more flexible.
Switch to Free Services
Oftentimes, you unwittingly overpay for business services. Do you really need the premium version of your preferred productivity software? Productivity software, advertising platforms, analytics programs, scheduling software, business planning curriculum, graphic design series, email automation, and other tools often have exactly what your small business needs for growth without paying for the premium service.
Negotiate with Vendors
Most vendors are open to some negotiation. You can often manage a lower rate based on your loyalty or shifting economic times. You can also simply reduce services and products purchased from vendors and suppliers by a small percentage, keeping you in business without going over budget.
Use Credit Card Rewards
If you do a lot of traveling for business or make frequent large purchases, take advantage of credit card rewards. You can get free air miles as well as up to 3 percent cash back on certain purchases with the right credit cards. Let these points rack up and use them to cover some of your costs. It’s one of the best ways to make a little passive income and protect your bottom line.