Gateway Financial LLC

Gateway Financial Blog

5 Cost Saving Ideas for Your Business

As a business owner, your number one job is to maximize profit.  One important part of that is managing expenses.  The five tips below will help you to optimize profitability by reducing costs.

Improve your bookkeeping

Taking control of your finances is one of the first and most important steps in reducing expenses. After all, how can you identify and track savings if you have no way to understand what you’re making and spending.

Ensure that your point of sale system is integrated with accounting software so that all transaction information is sent directly to it.  This will save time and errors and allow you to more easily identify savings opportunities.

Optimize Staffing

Labor costs are the biggest expense for most businesses, so getting the most out of your employees can have a significant impact on your bottom line.  Failing to keep labor costs under control can doom your business.  Monitor your sales activity relative to your staffing levels to ensure that you are scheduling the most employees at your busiest times and fewer employees when business is slow.

Reduce Employee Turnover

Employee turnover is a silent expense that can crush your bottom line.  Hiring and training new employees is expensive and time-consuming, not to mention the initial reduction in productivity.  Reduce employee turnover by:

  • Hiring the right people
  • Offering competitive pay and benefits
  • Giving praise and showing gratitude to employees
  • Allowing flexible work schedules
  • Showing opportunity for advancement

Improve Inventory Management

Inventory can tie up significant amounts of capital.  Stale inventory is keeping your money tied up and could cost you even more if it requires discounts in order to sell it.  Utilizing a reliable inventory management system can help to ensure that you only have the inventory that you need and to identify theft and waste.

Set a Budget and Review Regularly

To identify savings opportunities and to keep from overspending, set a budget and sales forecast and review it regularly.  Set a time each week or month to compare your actual spending to your budget.  This will give you better insight into where your business’s money is going.

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