Every small and medium sized enterprise is constantly seeking ways to improve profitability. Owners typically look at the customer-facing side, pursuing sales and marketing campaigns aimed at generating increased business. While this might have a positive impact on turnover, there is no guarantee that this will translate to a similar increase in margins. In fact, the converse can often be the case.
Sometimes it is necessary to view the question from a different perspective and look at the cost side of the profitability equation. Here, we explore some simple yet effective ways that any business can boost its profitability by reducing overheads.
Look around you
Physical office space is one of the biggest overheads any business has. It is also an area in which business leaders are often reluctant to economize. There is an almost superstitious fear that a business will not “look the part” and will start hemorrhaging business if it doesn’t have a swanky office in which to meet clients.
There are easier and more cost-effective ways. First, look to the space itself and how you are using it. If there is spare square footage lying around, you could consider downsizing or sharing with another business. Even if you have ambitious expansion plans, still consider downsizing. In this age of remote working, all that most businesses really need it a place to meet up and exchange ideas.
This brings us on to the question of “impressing clients.” Hired office space through organizations like Regus are all the rage. Typically, they are located in the more salubrious parts of the world’s key cities, so they really tick all the boxes.
Outsource your IT support
Outsourcing is another strategy that has become popular, and not just with the big multinationals. Smaller businesses are increasingly choosing to obtain IT support from Probrand, as it makes sense on every level. Staff costs are reduced, response times are the same or better and the level of expertise is inevitably superior, simply because businesses have access to IT experts from multiple disciplines. Some might shed a tear, but the truth is, the age of in-house IT support is rapidly being consigned to the pages of history.
Nobody needs a lecture to understand that reducing energy consumption makes sense. Protecting natural resources for future generations while saving money is the archetypal win/win. From a business perspective, where improved sustainability can deliver tax benefits and improve brand reputation, it could even be called a win/win/win.
Nevertheless, it is not always easy to see exactly how to achieve energy savings. The trick is not to think too big. A tenth of a percent here, and a couple more tenths there can all add up over the course of a year. Converting from harsh fluorescents to modern LEDs saves money and energy, looks better and makes for a more pleasant working environment. Printing only when needed and on draft settings, and using both sides of sheets reduces print consumables. These are just a couple of examples – why not brainstorm with the team to come up with three or four more?