Your business is all about making money, it’s the lifeblood of your enterprise. But it’s just as important to make sure you’re not losing money at the same time. To truly profit, you need to watch your expenses just as closely as you watch for potential new customers and clients. Follow these four tips in 2018 to keep your business on track.
- Stop paying for office space you don’t need
For many firms, renting office space is one of the largest expenditures. This is especially true in large city centres. A business based in London will pay anything from £35-£120 per square foot per year to rent an office. Since the rule of thumb dictates 100 square feet of space is needed per worker, even a small, ten-person business could end up spending well over £1,000,000 a year on office space.
This kind of expenditure can make ruins of any annual profits, especially for businesses operating with a relatively low turnover. The best way to address this issue is to leave traditional offices behind and move into a flexible serviced office. As well as coming with lower costs and built-in amenities such as WiFi and furniture, these workspaces can be expanded or downsized in line with your business, meaning you only ever pay for the space that you truly need.
- Keep employees stress-free
Having stressed employees may not come directly with its own price tag, but the estimated cost of a stress-ridden workforce is extremely high. In the US, worker stress is estimated to cost somewhere in the region of $200 to $300 million per year collectively. When broken down to the individual level, employees with high mental exertion levels are said to cost 40% to employers than they would otherwise. This factors in the cost of healthcare, compensation claims, turnover, sick days, and lower productivity.
With sheer numbers like this, it’s clear small businesses need to take note. Strained employees are less productive and more expensive, creating a lose-lose situation for worker and employer. The only solution is to do everything you can to keep your employees relaxed. One of the best ways to do this is to implement a corporate wellness programme. By having all staff participate in healthy relaxation practices, you can increase team productivity in a fun and informal way. Keeping costs down, productivity up, and employees happy.
- Train and retain your staff
Hiring new staff can be tempting, especially if you’re looking to add new skillsets to your business as it grows. But research from Oxford Economics suggests it costs over £30,000 to replace an employee. These costs come from two areas: the time it takes for the new employee to get up to speed, and the cost of recruitment. A high employee turnover, then, is to be avoided in all cases. For this reason it’s important to retain as many employees as you can. Simply treating them well and offering them clear career personal development targets should be sufficient to do this. If you do need to cover a new area with your business, it’s far more cost-effective to train up a current worker than to hire a new one.
- Rethink your advertising spend
Spending money on advertising is important. When looking to save money, many businesses make the mistake of reducing their advertising budgets, when what they really need to do is re-target them to maximise effectiveness.
Finding the ideal advertising technique or platform for your business can take time, but it’s hard work that surely pays off. After assessing your advertising avenues, whether by media audit or internal analysis, you will find the ones which are most effective, and save money by cutting back on the rest.
There are several methods you can try when analysing advertising effectiveness. Tracking where customers hear about your business is one of the best. Do this by offering a different coupon or code on every platform and collecting data on which code is used the most. Alternatively, you can undertake A/B testing, which pits two similar adverts directly against each other, either using a similar coupon system, or simple web tracking tools.
Whatever you do, it’s important to make sure no money is being wasted in this area, as it is in all of the areas discussed above.