Cutting Costs Without Compromising Quality In Your Small Business

There’s a fine line that all small businesses walk.

The line between keeping overhead costs manageable and ensuring that they’re investing appropriately in their business. All entrepreneurs know that reckless, or frivolous vanity spending can mean doom for a new enterprise. On the other hand, failing to invest in the right employees, the best equipment and decent quality products can inhibit their growth and damage a brand.

The Early Days

This balance can be difficult to achieve, especially in your early days. How can you be expected to stand out from your competitors when you don’t have the best front line employees to wow your customers, or the quality of components to justify the reputation of your brand?

 

Take a breath.

You can invest- even with the limited budget, not many connections, and limited resources. Like any savvy shopper, you simply have to look for ways in which to keep your costs down while still investing in quality. Seems like it can’t be done? Think again!

It’s a matter of knowing where to look for the bargains and knowing where your spending will yield the highest ROI. While this may vary slightly, depending on the nature of your business, are here some great starting points:

Buy used

Cutting costs doesn’t have to mean poor quality.

There are areas in which you can make a small sacrifice to save money, and not hurt your customers’ experience or detract from the prestige of your brand. Buying used materials, for example, is a great way of investing in quality raw materials without paying through the nose for them.

Whether that’s purchasing used steel tubing in bulk for your manufacturing processes or using reconditioned mechanical or electronic parts for your equipment.

Speaking of equipment, if you’re building your IT infrastructure up from scratch or establishing an office space using only an empty room, buying used can save you a small fortune.

Many small businesses out there are trying to maintain a cutting edge image when it comes to their tech, and as such upgrade on a regular basis. You may be able to pick up everything from desks and chairs to thin client PCs for a song. Auctions are also a great source of used office equipment.

Outsource?

Many startup entrepreneurs can get overly focused on protecting the integrity of their brand. While this is a noble sentiment, it can lead them to dismiss good solutions out of hand.

Outsourcing some essential functions to a third party provider is a useful way of saving money in the long term, while enhancing the quality of the services you offer. Outsourcing usually tends to offer a pretty high return on your investment.

If you need managed IT services in Denver, for example, you could consider getting in touch with someone like Mission Critical Systems who can provide IT support systems and monitoring so that they are able to swiftly resolve any IT issues that arise in your network to keep your systems up and running so that you can all continue working.

Outsourcing in the services of a digital marketing company, for example, can go a long way to growing your brand. While you may have lots of social media and marketing savvy, your attention is better spent on the strategic management of your business. Outsourcing to a third party provider generally costs less than establishing your own marketing department and offers some of the highest investment to ROI ratios you can get.

Likewise, outsourcing your IT provision to a third party can represent significant savings. Not only will you save on the upfront cost of building your IT infrastructure from scratch, your design can be regularly audited to ensure that it is cost efficient.

Cloud Computing

Speaking of IT, many smaller businesses are still wasting a small fortune on expensive server costs because they are either ignorant or are unduly mistrustful of the cloud. However, the cloud can be extremely to product quality.

Cloud based computing can save your company money in a number of ways. Using the cloud requires no hardware costs and the maintenance costs are virtually nil. You pay for a subscription, so the cost of maintenance and even upgrades is incorporated into the price you pay.

Cloud based solutions can also be scaled up or down, depending on the needs of your business. If your business grows, they can be upgraded without the disruption. It can boost your productivity, and even reduce your staffing costs by facilitating remote working. When employees are empowered to carry out their duties from home, it makes your office a greener place to work.

What About Climate?

We all know that temperature has a very close correlation with employee productivity. Even slight fluctuations in temperature can have an adverse effect on employee productivity. But just because you have to maintain a specific ambient temperature to get the most out of your employees doesn’t mean that you can’t take steps to reduce the cost of climate control.

Programmable and smart thermostats can cut your climate control costs without compromising on your employees’ comfort. Use a programmable thermostat to customize your workplace’s climate control schedule to your opening hours, increasing your heat in the morning and dialing it back later in the day when the ambient heat is at its apex.

If your climate control needs are more variable, a smart thermostat can be tremendously helpful. Smart thermostat technology learns your climate control preferences and gauges your building’s energy profile. Once this has been established, it automatically adjusts itself to maintain a comfortable temperature as cost efficiently as possible.

While this may represent an upfront investment it will pay for itself with savings of around 10%-12% a year on heating and cooling.

Don’t let anyone tell you that you need to cut down on quality or employee productivity to save money in business!

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

 

Image: Bullseye, Jeff Turner CC by 2.0