As a bookkeeper for a couple of businesses, I have seen first hand how easily the expenses can get out of control, especially if you are trying to wear all the hats, working long hours, or just starting your small business. You get busy trying to make money, but sometimes the expenses can creep up to the point you are wondering just where your money is going.
Hourly Rate or Shop Rate - This all depends on the size of your business, but for most businesses, there is some form of "overhead". Even one that you have started in your garage or basement will have some startup equipment or costs that you need to capture in your hourly rate or shop rate.
You need to add up ALL the expenses to run your business from turning on the lights to your insurance and fuel bills. Everything needs to be taken into account before you sell your services or product.
The idea is that you should turn a profit, and if you don't take all your expenses into account, you will not see the money you were hoping for at the end of the month.
You need to sit down, and really go through the expenses that are associated with running your business, if you just can't find the time, hire someone to do this for you. It is well worth it. If things are too high, and you don't want to increase your prices, then you need to find a way to lower those expenses.
Now before you throw all the papers across the room looking for those large numbers to reduce your expenses, you may find that simply shaving some off of each category will mak
Bundle Telecommunications - If you have a phone provider for example, see if they will also do the internet and cell phones, faxes etc.. By bundling with one provider you can get a much better deal. You would be surprised how many businesses will have the phone through one company the internet through someone else, and the cell phones through numerous companies.
This may take a bit of setup time, but the savings can be huge and worth the trouble. Pick the one that can offer you the most services for the best price, and don't be afraid to tell them you are "shopping around" this is a great first place to start for cost saving ideas for a small business.
Utilities - This would pertain more to a business that rents a facility. Most rents for business units and industrial units do not include utilities. You have to setup and pay for them yourself. If your heating bill is large, consider asking the landlord to insulate the roof and offer to share the cost with them (We did this in our unit. The roof was being redone, and we offered extra money if Styrofoam sheeting was added to help with the natural gas bill.)
If that is not an option, then consider purchasing a programmable thermost
Set it to automatically lower the temperature over night, then set it to come back up to a normal temperature 1/2 hour before you arrive for work and keep it low on weekends and holidays. Even consider keeping it down a degree or two and wear a sweater.
Even a difference of 5 degrees overnight can make a big difference on your heating bills.
Water - Check to make sure you do not have any leaking taps, and that the bathroom is equipped with the more modern water saving toilets. Many cities will give rebates if you change these out, so they will cost you very little.
Lighting - If the flourescent lights in your office or shop are older, check with local energy saving programs. We found out that the lights could be replaced with new more cost effective ones for very little, and rebates were offered to remove these older lights that cost more to run.
Organize Supplies - This was a big savings for a company I did bookkeeping for. It is an electrical company, and they run two vans filled with supplies, tools, ladders etc. But when they got to customers houses and needed supplies, they did not want to search through the disorganized van, so would buy new supplies locally.
By taking the time and organizing bins and boxes with detailed labels in the vans, they could see the most common parts and supplies they would need right away without wasting time buying new ones, and were trained to keep it organized and neat. There tended to be this "I will do it later" mindset, and of course, it just never happens when you get really busy.
They were also trained to keep track of the bins so that they could be refilled when needed from the main shop.
Although there was a great inventory system setup at the main shop, there needed to be "mini inventory" systems set up in the vans. This saved a lot of time and money in the end.
Bulk Purchasing - Many suppliers will give you a better deal if you purchase your supplies in larger lots. So, it would be worthwhile setting up an area for storage so that you can take advantage of these savings. A good cleanout of your shop, office or supply room can help with this.
Accounts - Many suppliers will give you a better deal if you set up an account and purchase larger lots, you will usually get a wholesale price and a bill once a month. This can make accounting easier.
So, if you wear all the hats in your business, and are running here there and everywhere, try and take a day and really look at your processes, and see if you can not only save money but be more organized yourself and not be burning the midnight oil.
Find cost saving ideas for small businesses, doesn't have to be big ticket items, it can simply mean shaving a few dollars here and there and this can add up big time.