Profit Boosters for Business: How to stop your spending leaks and save money
Making money is the mission of all businesses. The equation is simple – increase revenues or reduce spending.
Are you keeping an eye on your business expenses? How can you save money?
Nearly every business has spending holes – leaks in your company that drain your money without you noticing. In the pursuit of more revenue, we can sometimes forget about these expenses, particularly those that may seem insignificant or trifling. But these spending holes add up to big bucks over time.
The trick to saving money is to plug these spending holes.
Plugging spending holes should be a priority for your business. It won’t take long to get positive results. Making small cost savings here and there will add up over the long run.
The results will allow you to use your hard-earned money more wisely whether that’s reinvesting or paying yourself a nice dividend.
Here are four ways you can plug your financial weaknesses now and save money for your business.
Contract management – be organised!
There is a common assumption amongst businesses that once a contract is finalised you can safely lock it up in the draw to never be reviewed again. This is wrong.
Before you start yawning, it is crucial to review the terms of your contracts every three to six months. If you are locking your contracts away then you are failing to properly monitor agreements that may have serious financial penalties attached if legal obligations are not met. Furthermore, you are putting your business at risk of missing deadlines, weakening its bargaining position and even tying it into costlier terms that aren’t necessary.
What’s the solution?
Taking appropriate steps to manage your contracts will save you a considerable amount of time and money resolving issues that could have been avoided in the first place. Be sure to look at our Contract Management Checklist in our next blog to make sure you have everything covered.
Are you paying for unproductive staff?
Did you know even the most productive Aussie workers waste 12 percent of their time at work each day? (Sourced from http://www.dynamicbusiness.com.au/hr-and-staff/time-wasting-staff-cost-employers-40b-each-year-28052012.html).
More than 3.5 million workers fall behind the national workforce productivity standard and cost local businesses in excess of $40 billion per year. (Sourced from http://www.dynamicbusiness.com.au/hr-and-staff/time-wasting-staff-cost-employers-40b-each-year-28052012.html).
The cost of unproductive staff can have a detrimental effect on every aspect of your business. It is imperative that you identify the employees that are consistently slacking off and take measures to boost their productivity before this non-productive culture spreads to other employees.
So what do you do with an unproductive employee?
Arrange a meeting with your employee and find the reason behind their non-productivity. From here, you can identify the issue and give the employee an opportunity to rectify. Document everything discussed so all parties have a clear and easily reviewable understanding of both employee and employer expectations.
If they haven’t fixed the problem, make sure you review your employer rights.
Do you have underutilised equipment?
Think about your work environment. Is there unused machinery gathering dust in a corner? Or do you have centuries-old office equipment piling up in the back room?
If so, don’t be alarmed. You are not alone. Many businesses have thousands of dollars’ worth of unused equipment.
What can you do? It’s beneficial for your business to identify any underused assets and decide whether to reallocate or sell them. This will give you the power to cut your losses and save money that can be put back into your business.
Steer away from ineffective advertising and marketing
The Yellow Pages is gone. Direct marketing mail goes straight in the bin. Smartphones can block unrecognised callers. There are social media tools but advertising costs are escalating rapidly with little return. So what do you do?
The money your business spends must be directed to your target market. One way to do this is to maintain healthy relationships with your clients.
Regular communication with clients is vital to maintaining healthy relationships. This is achieved through blogs and newsletters. The client will be happy you are sharing new ideas and insights with them, and they will appreciate the fact you are contacting them outside of your business dealings.
The content of your blogs and newsletters will build your business’s identity; therefore, it’s important they are protected from intellectual property theft.
Want to know what a contract review could do for your business? Please don’t hesitate to contact our experienced Newcastle commercial lawyers at Butlers Business and Law on (02) 4929 7002 or fill out an enquiry form on our website.