Preserving cash by cutting costs should be regarded as one of the key priorities this year and cost-saving measures can add up.
This is the message that Elize Giese, head of investments for FNB Business, wants more business owners to be aware of following what was a tough 2015 and a currently unpredictable economic climate.
“Well-devised savings strategies can boost profitability and cater for unforeseen expenses in times of difficulty,” she says.
Cost-saving measures should in 2016 focus on two basic actions: cutting down on your use of various resources and being more cautious with how money is spent.
Here are 9 of our favourite money-saving tips from Giese.
1. Outsourcing – outsourcing support functions such as marketing, events management and public relations can help small businesses to cut costs. Opting to use a service provider that charges an hourly or project fee can often be less expensive than hiring a full-time employee.
2. Save on HR costs – retaining talented employees can save the business a lot in human resources costs and also encourage workers to be more productive. For example, stores that offer commissions often encourage employees to go the extra mile, leading to an increase in sales.
3. Cut down on meetings – simply cutting down on travelling to meetings and using facilities such as conference calls and Skype can generate huge savings for businesses.
4. Look at discounts – negotiating and entering into long-term contracts with your suppliers can earn the business big discounts on certain products and services. Your supplier wants to stay in business too, and they are dealing with a tough economy just as you are, so they may be willing to offer you a better deal rather than lose a regular customer.
5. Consider sponsorships – many businesses rely on regular events with their customer base and often get sponsors to help cover the costs of these events. In return they have an opportunity to advertise at the events – both host and sponsor win.
6. Think beyond cash – when cash gets low, as it tends to happen in small businesses, don’t close the door on getting what you need. Think about the old practice of bartering. You may be able to offer your supplier a product or service they need. So you could exchange items instead of paying each other cash.
7. Share your expert knowledge – you could share your industry knowledge at an event or radio/TV interview. This gives you and your business excellent exposure at no cost.
8. Do less printing – cutting down on printing can help the business to save costs. For example, consider using the overhead projector for meetings and digital business cards, instead of printing.
9. Look at your water and energy costs – devising strategies to save on electricity and water usage can have huge benefits for the business in the long term. For example, some SMEs have already started saving costs by installing solar geysers in their work premises.