As a business owner, I am sure you firmly are committed the development and growth of your business. As 2Q winds down, now is a great time to reflect on your mid-year performance and find out if cutting unnecessary expenses might boost your bottom line. If your business is struggling with meeting mid-year growth projections, use this summer to make much needed changes before the fall sales season. Read on to learn more about how to cut business expenses during the summer to ensure you achieve year-end profit objectives.
Reduce Energy Costs
In Florida, we are all intimately aware of the heat we swelter through during the summer months, and the corresponding spike in our utility bills. My suggestion is that try to reduce those energy costs this summer to save money and a great start is by pre-cooling your office. Set your thermostat to a cool temperature in the morning and slightly adjust it to warmer-than-normal temperature in the afternoon. This can help reduce energy usage by 25% to 35% during peak electrical demands, while also saving wear and tear on your AC system. In addition, remind your employees to turn off lights when a room is not in use, and turn off unused office equipment before going home for the weekend.
True Story: Every June, a local upholstery shop sends its industrial sewing machines home with its employees. The employees visit the shop on Monday to pick up their materials, and then return on Friday to deliver their finished goods and collect their paychecks. The employees (most of whom have school-age kids out on summer break) really appreciate working from home, and the shop owner saves money by not cooling his entire shop floor during the hottest time of the year.
Reduce Personnel Costs
As a business owner, you know how hard layoffs are on your people and your company. Therefore, savvy owners often come up with creative ideas to keep their quality staff employed and productive during the summer slump. Depending on your payroll costs during the summer – especially if you are a seasonable employer — you may want to consider eliminating pay-raises or giving bonuses. You should also consider outsourcing certain projects to save money. Make sure you have the appropriate work agreements in place prior to doing so, though.
Negotiate Lower Prices with Suppliers
Finally, a significant way to reduce business expenses during the summer is to negotiate lower prices with suppliers. Most suppliers are willing to negotiate a better deal with a business like yours to avoid losing a major client mid-year. Try to find another supplier who is offering the same product at a competitive price. Ask your current supplier to match the price, or offer a better rate. If they refuse to do so, you may want to rethink your business relationship.
I hope the tips above help you reduce business expenses this summer. Please share this article with other business owners who are looking to cut business expenses.