8 Ways to Reduce Costs in Small Business

As time is passing, the survival of a small scale business is becoming tough. Every day is a fight to sustain. For many small scale enterprises, regular financial support is difficult due to very few institutes willing to provide monetary aid to these SMEs and startups. 

Cost cutting and the reduced business cost is followed to sustain existence by many big business giants in the time of crisis. This helps in reducing many unnecessary business expenditures.  But for small business, cost limitations and effective usage of resources should be a regular practice due to the limited source of income and future revenue recovery.

Let’s understand a few of the ways which can be used by SMEs and startups to reduce business cost.

1. Check the Expense sheets

Understanding the issue is the first step to cure it. Check your processes and spot out the areas which are causing high expenses for the business or causing huge losses and need immediate attention.

2. Plan & Budget

Plan every process and set a budget for each department. Once you fix the budget for regular usage and for emergency crises, you will have a fair idea on the overall budget requirement for the up keep of the business processes and day-to-day workflows.

Read More – Tips to Reduce Cost in Small Business

3. Stop Pilferages

Understand your business pitfalls and pilferages will make you more aware of your running incoming and its outflow. Many companies have yearly audits which make inventory handling and process management prone to theft and pilferage. Keep a strict eye on what expenses are going on what requirement, by regular surprises audits which help in reducing unnecessary wastage of resources.

4. Limit Stocks

One of the main areas is Inventory management where major funds are parked. Over stocking should be avoided even if you are getting good discounts. You should not put your funds in which running cycles gets affected. Any unnecessary purchase should be avoided. Proper methods should be taken to forecast your product demand and understand your market trends before ordering stacks for your warehouses.

Read More – Avoid Making Costly Inventory Replenishment Mistakes

5. See way to fetch in money

Liquidity of funds is utmost required in time of crises. See if there is stock which is lying unused for long shall be sold. Also, keep a watch on finish products not sold for a long time, which can be moved out on discounts to bring in funds from each and every way. 

Recovering debts and reducing payment cycles and increasing creditor cycle also work well in controlling the pressure of funds.

6. Reduce Travel Costs

Travel and other modes of unnecessary expenditure on client visits and more can be avoided as much as possible. Usage of internet, mobile sales apps and free services for better communication should be used to enhance overall productivity and connectivity with the clients.

7. Reduce Manpower

Automation is the key to any money saving strategy in today’s business model. Check each and every process and find where you can utilise one person for more jobs, by paying additional pay off or automating the process all together. Pay off and removing non productive resources  with minimum new hiring should be the best way to save money. Also, outsourced menial jobs can save a lot of money on manpower and administrative work.

Read More – Reduce Your Operational Cost

8. Eliminate Avoidable Finance Charges

Maintain strict control over late payments of loans, phone bills, credit card fees, and other membership fees, if any. Any tax penalties should be completely avoided. Auto payment modes help in doing required payments on date and avoid any penalty charges. Also, unwanted credit cards and expenditure should be avoided to save yearly expenditures.

Other than these 8 ways there are also some more ways which will help small business to reduce their costs :

• Pay your invoices early – The suppliers struggle very much sometimes to get the cash due to the late payments made by their customers. So, suppliers will be willing to give discounts for you if you pay them earlier than the usual time. This will make you build a good relationship with the suppliers in which you might get better deals in the future. But paying earlier to the suppliers is also not that easy, for that you need the cash on hand.

• Use online free tools – Some of the companies invest so much on buying online outdated applications as they might not trust the specific free services. For example, you will spend thousands buying some of the office applications and database entry software, instead of this you can just simply use google docs. Google docs are very good and are free to use online. There is so much free software which might help your company and save a lot of money.

• Save Electricity – Cutting down the electricity costs is very simple. All you need to do is apply some office policies and be very strict about those policies. Unplug the unused electronics in the office and switch off the lights when the rooms are not used. Use sunlight in the rooms when it is possible which will drive up your force of the work productivity and make them feel much more natural. Besides, unplugging the electronics will also extend the lifetime of them and will reduce the chances of it breaking down, which might save maintenance costs.

• Reconsider maintenance – Regular maintenance and cleaning services will lead to expensive bills. So, until it’s very much necessary do not use them. For instance, Instead of calling the cleaning group once a week, call them twice a month. You also can find out that most of the work which they do can be done in half of the time. So this will significantly save you money.

Sales Management Software For Small Businesses

Optimum utilisation of resources & cost cutting should be a regular process in small businesses at any stage of the sales lifecycle. Small businesses should consider using an automated sales management software which can aid the overall management of the sales and other business process and regularise the expenditure for the organisation.

Let’s discuss some of the ways in which online Sales CRM software can help in reducing code for SMEs and startups.

1. Organised Business Process

With organised system of contact management, lead tracking, sales lifecycle and more, small scale enterprises can leverage the uses of a sales CRM software by recording every information required for business maintenance from employee details to complete sales lifecycle into a cloud based database.  

With organised system of data management, unnecessary wastage of finance can be avoided.

2. Automated Features

Menial jobs like lead tracking, quotation creation and sales order amendments take a lot of productive time for employees and leave a very less window to effectively use in productive work. With automated system of data tracking and sales process management employees can use their time efficiently for productive jobs and sales closures.

SalesBabu CRM allows users to create auto notification and pre designed templates to assign and intimate details to clients on a regular basis which saves a lot of time in drafting emails and sending repetitive marketing information to customers.

Read More – Quotation Management Software

3. Internet Based Services

SalesBabu CRM sales management software provides web based software support which can be integrated with different third party vendors like email servers, SMS service vendors, social media websites and more, which helps in automating our customer interactions through these integrated softwares and provide a better and cheaper communication system.

Also, features like Mobile sales apps, can be used to track internal process management by sharing live location , work presentations, work status and more, over the internet through their mobile phones and gadgets while on the go. 

These features not only saves a lot of money but also help in improving overall productivity of the employees.

Read More – 8 Reasons to choose cloud based CRM for your business

4. Reports and Analysis for Inventory Management and Planning

Tracking your business on a regular basis is very critical to keep a check on your expenses. With Sales Management software, we can generate reports and analysis for the overall process expenditures and the pain areas which needs to be rectified. 

Also, with proper demand forecasting methods in these softwares, inventory management and overall product planning can be done in a more productive and cost effective ways.

Read More – MIS: Now Get All Your Reports Just by a Single Click

Conclusion

Small scale enterprises have their own restrictions but maintaining a cost effective and organised aid like sales CRM software can help in not only reducing overall organisational cost but also helps in organising the end-to-end business processes.