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With the rate of inflation hitting 12.7% in June and forecast to keep rising until 2023, you may be looking into ways in which you can reduce your business costs to retain your profit margin. Hopefully, these few tips will help you to bring your costs down and allow your company to stay afloat during these trying times.
How to Reduce the Costs of Your Business?
Moving Online
Online marketing is a relatively low-cost way to carry out marketing campaigns that can be monitored and analysed. By moving marketing online your business can reach customers worldwide, which increases visibility and revenue. By building your customer email list and implementing referral programmes you can increase the likelihood of new customers. A recommendation from a current customer can be more likely to result in a sale than traditional paid advertising campaigns, so focusing on providing customers with deals and discounts may be a smart way to draw in sales.
Commercial and production real estate can be expensive so consolidating your space can be a great way to reduce business costs. You can lease unused space to another business or individual or consider moving your business online. With an online business, you can arrange to have your products shipped directly to the client from the supplier, which negates the need for hefty fees being spent on storage units to hold your goods.
Lower Transportation Costs
If you need to buy company cars, buying new may not be the best way forward. There will be plenty of used cars for sale near you that can be a great alternative to a new vehicle and can help keep business costs down. Some of the top used car dealerships will go out of their way to ensure that their cars are in perfect condition and will include a manufacturer warranty alongside other benefits such as MOT cover.
For fleet vehicles with regular journeys of up to 100 miles per day, electric vehicles can be a great way to reduce business transport costs. While they can be more expensive to buy outright, investing in electric cars instead of petrol, could save money in the long run, especially when considering the rising fuel costs in the UK.
Focus on Employees
You should look to assess the usage of your current employees’ skills and experience by ensuring that they are in roles which are best suited to them. You may find that you have expert salespeople in design roles which may be disadvantageous to your business model and could be ineffective for productivity. Employees who feel that they are a good fit for their role are 36% more productive than those who don’t, and in this current climate where costs are soaring, time equals money.
If you want to hire new employees, you may want to focus on freelancers and part-time workers. Traditional full-time employees are expensive as business owners have to account for a range of overhead costs such as paid time off and training costs as well as paying a base salary. However, freelancers can reduce costs without foregoing work output or quality.
Generally, the neglected talent pool of these workers are people in their 40s and 50s who will be committed to delivering a service, rather than climbing the career ladder, so are likely to be happy to follow whatever direction is required for your business.
