Oh, the thrill of the sale!  You’ve got to admit that there’s a rush that comes when you get that order email, a signed agreement comes in, or when someone taps their card to pay.  All your hard work has paid off!

It takes so much of your blood, sweat, and tears to earn that sale, as Chief Empire Builder, it’s your responsibility to make sure it doesn’t get wasted.

Reducing spending in your business can help improve your financial health and increase profitability. Here are 10 ways you can cut spending in your business:

1.          Review your expenses: Conduct a FULL analysis of your business expenses – yes that means going through your credit card and bank transactions! Look to see where you can trim costs without significantly impacting your operations or quality. Identify any unnecessary or non-essential expenses that can be eliminated or reduced.

2.          Negotiate with suppliers: Contact your suppliers and negotiate better deals or discounts. Explore the possibility of bulk purchasing or long-term contracts to get better pricing. Comparing prices from different suppliers can also help you find the best options; don’t get too comfortable with one supplier – make them work for your business.

3.          Cut back on overhead costs: Evaluate your overhead expenses, such as rent, utilities, insurance, and office supplies. Consider downsizing your office space, implementing energy-saving measures, or switching to more cost-efficient service providers. Look for ways to reduce waste and streamline your operations.

4.          Optimize your inventory: Look at how you manage your inventory. Are you sitting on inventory for months? Overspending on inventory that you can’t move quickly, squeezes your cashflow and could lead to additional storage costs.  Just because it’s a better unit cost doesn’t mean it’s a better deal if you can’t afford it or sell it.  Try implementing just-in-time inventory systems by looking at past years or seasons to predict demand. Read here for more inventory intel.

5.          Evaluate staffing needs: Do you have contractors or employees? Do you need them all? Could they be doing more? Are their skills aligned with their job? Could you offer flexible work arrangements or part-time work to reduce labor costs? Time to do a deep dive.

6.          Embrace technology: There’s so many tools and systems out there to make our lives easier, it’s silly to push back against them.  Identify areas where technology can help automate processes, increase efficiency, and reduce manual labor costs. Check out this blog to read about the tech I use in my business.

7.          Review marketing and advertising expenses: How is your marketing working for you?  Do you know?  Be sure you’re monitoring your efforts and up the ante up on those things that are getting the best results and phase out those that are not doing anything for you.  Don’t forget to include costs for any contractors so you get the full picture of your costs.  

8.          Encourage cost-consciousness among your team: Make sure your team members (both contractors and staff) are on-board with your cost-conscious efforts.  Encourage them to find ways to save money, suggest cost-cutting ideas, and spend as though it was their own money!

9.          Check and understand your financials: Start by opening the email and looking at your financials! If it looks like gibberish, you’re not alone!  Reach out and take some time to learn and understand what you’re looking at.  Watching your financial data will help you identify areas of overspending and make informed decisions to cut costs. Visit these past blogs to dive a bit deeper into financial statements: income statements, balance sheets, cashflow statements, and a few others.

10.     Stop treating your business accounts as your personal piggie bank.  Nothing derails your business cashflow like constantly using your business account as your personal one. It might not seem like a big deal, but little blips here and there add up and derail any planning you’ve done to manage your cashflow.  It’s 1000x better to transfer a lump sum to your personal account and spend through there, cause then you can at least plan for it, and track it.

Remember, while cutting expenses is important, you need to strike a balance between cost-cutting and maintaining the quality and functionality of your business. Focus on costs that have minimal impact on your core business activities and customer satisfaction.