Every business owner spends time evaluating ways to increase revenue and ways to decrease expenses. While reducing costs whenever possible is important, each line item should be carefully considered so that it doesn’t have an adverse effect on business in the future. It’s always important to ensure the quality of the products or services isn’t compromised by cutting expenses.
As you evaluate your business, here are ways to reduce expenses with minimal effect on quality.
Renegotiate Contracts
Most business owners lease equipment or sign contracts for service. Every year or two, contact your vendors and ask if your contract can be reduced in any way. Expenses might include phone and internet service, cleaning services, health insurance, building and liability insurance, equipment leases, and pest control. If the vendor cannot reduce expenses, research opportunities to contract with new vendors for cost savings opportunities.
Ask for Interest Rate Reductions
For business credit cards and lines of credit, ask your financial firm if you can have a reduction in the interest rate. As years of on-time payments to these vendors pass, your credit will improve, and you should be able to receive lower interest rates. If your current vendor cannot reduce your rate, consider looking at alternate funders to see what current rates they offer and if they offer any specials.
Contact Affinity Beyond Capital about our low rates and credit products.
Upgrade Equipment
For equipment like cell phones and computers, it doesn’t take long for a model to become obsolete. Many companies will offer a contract reduction and replace old equipment with new at a reduced cost in return for a new contract. Review these opportunities to see if they fit your business needs.
There are also a couple of ways to reduce costs and improve your business operations overall. Thus, having a positive effect on revenue.
Improve Operational Efficiencies
Is your equipment running as it should? Is there any type of office equipment that is slowing production and forming a bottleneck for your business? Evaluate every process in your operations to ensure you don’t have any dysfunctional equipment. This can lead to employee overtime with delayed production, where simply replacing old equipment could improve production and employee productivity.
Improve Customer Service
It’s 20 times harder to gain a new customer than it is to keep an existing one. Evaluate your customer journey. Are customers being treated professionally throughout the journey? Examine everything from the sales process to billing to support to customer service. Is the level of service hiqh-quality for every department?
How do you gauge customer satisfaction?
What do you do with the information you collect?
Do you use to improve your business?