Ways SMEs can save money
When it comes to your small or medium enterprise (SME) the ability to save on operating costs without sacrificing efficiency can make a huge difference in both your bottom line and your future as an organisation. As a fast growing sector of the Australian economy and with over 1.2 million SME’s across the nation there are a wide range of ways, from the obvious to the innovative, to save money. Consider the following options to do more with less, and to prove once and for all that saving money does not mean sacrificing profit.
– Keep your workforce flexible
Full-time employees may seem a good fit as you know you’ll have staffing options. However, review your roles annually as part-time or even outsourced roles may become more beneficial going forward. Using consultants or freelancers can cut the cost of overheads like full-time salaries and office space.
– Utilize your workforce
Resist the urge to always hire well-qualified candidates from outside your business. There are countless times when promoting from within ensures knowledge is brought up. You can also avoid the probation training period you’d encounter with an external employee. Consider instituting responsibility based pay or rewards based pay. Encouraging your employees to achieve when it benefits them directly is a win-win for your SME.
– Streamline your office space
Ensure you’re not wasting your floor space. If spare office space is not in use consider sub-letting the area to earn income until you’re confident of a successful expansion. Filling space with multiple inventory when a single unit could complete the same workload should be avoided. Consider investing in a reliable office equipment to ensure your internal office needs are always met, saving you time and money.
Never be afraid to negotiate or seek a lower price, the worst case scenario is being told no. Research suppliers and don’t be intimidated when looking for the best deal for you, keep in mind; if the deal doesn’t suit your needs you can always just walk away. Another handy tip is to investigate bulk buying options where applicable to enjoy better economical deals through large orders.
– Research everything
Many opportunities to cut costs for SME’s are missed due to poor research and planning. Keep a close eye on all your costings, from sales through to supplier costs. Annual reviews focusing on every individual overhead can save huge amounts over time. In addition, research your customers too. Targeting the wrong demographic or taking on the wrong clients can have a negative effect if they don’t pay or don’t connect to your services.
Ultimately, no two SMEs are the same which means cost cutting measures will differ across locations and industries. What remains a common goal however is the desire to reduce costs and to use that saved money to reinvest in future growth. SMEs take great time management and effort so any chance to streamline costs should be prioritized and explored.
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