While planning ahead for the upcoming year is a great time to find ways to lower your company’s operating costs, it’s not just the major expenditures that count. If you are looking for ways to cut down on your business expenses, try implementing some of the following ideas for small changes. When added up over the course of a year, they can save your company a lot.
• Use employees’ time effectively. If some employees frequently have down-time during their shift, find ways to make this time productive. Have them perform routine maintenance tasks, clean their work areas or cross train them in other jobs that they can do. If you have predictable slow and busy seasons, use temporary workers to fill the gaps when it is busy instead of paying wages year-round to employees that are only needed part of the time.
• Ask your vendors about available discounts. Common discounts include quantity-based and early payment discounts. Some may be willing to negotiate better terms, especially if you take the time to compare prices with other suppliers.
• Review all automatic charges and repeating fees. These include credit card and banking fees, website charges, tech support, office supply services, and association or group memberships. Each charge may be small, but all of these little costs can add up fast. Determine how much each benefits your company and cut any that the cost is higher than its benefit.
• Run the numbers to see whether leasing or buying new equipment makes more sense for your company. Leasing has the benefit of avoiding large upfront costs as well as savings on maintenance, repairs and upgrades. One of the biggest cost savings of leasing equipment is being able to use it for a short time – either to test it out or because you expect new technology to be released soon.
• Have an energy audit done on your facility. These are offered for free by many state, city or county governments. Fixing the leaks and cracks the audit finds in your building can increase the efficiency of heating and cooling systems significantly. You may also discover better ways to operate that take advantage of energy discounts by avoiding peak hours.
• Review your utility bills and compare them to the previous year. If any bills show significant increases, check to make sure you do not have leaky pipes or other problems in need of repair. Look for alternative ways to heat your building. Many pallet companies have found that large wood-burning furnaces are good investment to lower heating costs.
• Be efficient with lighting. Replace light bulbs with fluorescent or LED bulbs. The initial purchase price is higher than standard bulbs, but they use much less energy and last much longer. And some state or city governments offer rebates that cover some or all of the price difference. Installing motion sensors on lights in rooms that are frequently empty, such as restrooms and storage rooms, can also reduce energy usage significantly.
• Review all insurance policies with your agent to see what savings are possible. Raising your deductible could offer significant savings, even when you end up paying the full deductible. Also, check with any trade associations or professional organizations you are part of. Many offer group insurance options at competitive prices.
• Don’t print or mail anything you don’t have to. Offer customers the option of receiving invoices by email. Use your bank’s online bill pay service instead of printing and mailing checks. Many banks offer this service for free, including the cost of postage.
• Get rid of unneeded phone and communication services and find low cost alternatives. Switching to a phone service that runs off the Internet might lower your phone bills fast.
