Four areas your business can cut costs

Good cash flow management involves spending only where it's needed, but there are times where expenses can spiral out of control. For a small business, these expenses add up and can cause a nasty surprise at the end of each quarter or year. However, there are some areas where costs can be cut without significantly compromising employee wellbeing or the quality of your business.

Here are four areas you can cut costs: information technology, insurance, marketing and business travel.

Information Technology

With technology getting more and more advanced, your processes can also become more streamlined. Instead of constantly upgrading to the newest software, consider if it's actually needed - if your existing model works, stick with it.

Additionally, instead of paying for extra storage space and hard drives, consider storing information in the cloud (a virtual environment located on the Internet). You can opt for cloud computing within your organisation only, similar to an Intranet, if you have security concerns.

Instead of paying for bulky teleconferencing equipment and connection fees, you can look towards online conferencing systems such as Skype, which is free, or affordable online videoconferencing options such as Citrix.

Insurance

Running a business can incur significant insurance costs, such as medical, property, asset and shipping insurance. Worker's compensation and fire or theft cover are also other types of insurance that you need to allocate money for.

However, a good way to reduce these costs is to research a variety of small business insurance policies and negotiate with your provider before the renewal deadline.

Also, reduce the risk of your employees falling sick and accessing health insurance by keeping them healthy - ensure the workplace is clean and offer free health checks.

Marketing

Investing in marketing and advertising is essential for promoting your firm's reputation and strengthening sales. However, a lack of market research and overly generalist tactics can push your costs up higher than you expected them to be. Spending money on where your target audience is will be far more effective than a blanket campaign.

For instance, if your target audience uses mobile phones to purchase your products it may be a good idea to make your website mobile friendly or send them text-only offers rather than put out TV ads.

Other tasks that you could do in-house rather than outsource include: monitoring press coverage, website building, simple graphic design and layout, search engine optimisation and writing media releases.

Business Travel

According to software company SAP, more firms are looking to reduce necessary travel costs in a tight and unpredictable economy.

Some quick ways you can do so are: Booking early or locating discount fares, opting for economy instead of business class tickets, not using a travel agency, booking cheaper hotels and combine several meetings into one to reduce the frequency of your travel.

 

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