Seven Savings Strategies to Rescue Your Bottom Line
Does your small business want to turn a profit in 2009? Sound impossible given the general turmoil going on in the economy?
There are only two ways to enhance your bottom line: increase revenue and reduce costs. When the economy was booming, most companies focused almost exclusively on growing sales. It was a feeding frenzy, with businesses determined to satisfy increasing customer demand. As a result, opportunities for cost-cutting and efficiency went largely ignored.
Now, the boom is over. Before you lay off employees or slash product offerings, search every nook and cranny of your business for hidden savings.
In some cases, creating savings requires nothing more than focus and elbow grease. In others, your business may need to invest in new technologies. When an investment is required, shoot for ultra-fast payback. In this economy, that means finding technology products that will pay for themselves in one quarter, one month or even weeks. And yes, they do exist.
Small businesses that act now to find hidden savings will realize even more benefits over the long haul. New efficiencies will provide a cushion of both time and money while the economy recovers. Plus, once sales are booming again, your business will be positioned for even faster growth and higher profitability.
Here are seven strategies to save your company some fast cash – now and in the future.
- Get payroll right
How much are you over-paying hourly employees? Chances are, it’s quite a bit. An extra five minutes for a cigarette, ten minutes for a phone call … it adds up fast. You might also be a victim of the buddy punch, where friends clock in for one another to cover up late arrivals or early departures.
Throw in the hours spent tabulating timecards, and your business is losing thousands of dollars a year.
The solution? An automated time clock that uses fingerprint technology for payroll services. Employees can clock in and out with a quick touch of the index finger. Forget about buying punch cards or adding up hand-written timesheets. At the end of the pay period, the system can automatically total payroll, including application of overtime rules.
A high-quality biometric system starts at around $995, so you can achieve payback on your investment in as little as one pay period. The savings will continue to rack up over time. More dollars are saved when payroll personnel are needed less, or can spend time on higher-value activities.
A side benefit? Employees can be freed to control their schedules, as long as they punch in and out for each break and work a certain number of hours. Plus, they will be paid accurately – every time.
- Sell more of what’s moving, reduce what’s not
It’s tough for small retailers to compete with the big boys – especially when they have some inventory sitting on the shelves forever, while running out of other key items. The unwanted inventory remains on the books, tying up much-needed cash. And frustrated customers who can’t get the products they need go elsewhere.
That’s why mom-and-pop shops must graduate to automated point of sale (POS) systems which speed up the checkout process while also keeping an accurate track of inventory. At any given time, a simple report reveals which items are moving – and which are not.
With this information, you can stock the right items at the right times – and keep customers coming back for more. It won’t take many additional sales, or much reduction in unwanted inventory, to pay for the initial investment. Basic POS systems start at less than $1,500 and more specialized, restaurant POS systems run around $2,500-$5,000 per terminal.
- Manage your inventory, instead of it managing you
Many companies have a warehouse full of inventory. Ask exactly what kind of inventory, and management has no idea.
It is nearly impossible managing inventory manually, without wasting a great deal of time and money. This leaves many small business owners trying to manage inventory in their heads, which simply doesn’t work.
There is a quick fix. A barcode-based inventory tracking system knows exactly how much inventory you have, where it is located and how much it cost. Plus, it can help set reorder points and determine how much of each item is needed. This ultimately lowers inventory carrying costs while also ensuring better customer service, since you will rarely or never run out of stock.
Is it worth the investment? Definitely, since one big sale will take care of the cost. A total solution, including software, scanner and printer starts at around $1,295.
- Use what you have, buy what you need
Employees push to buy new assets to do their jobs, from PCs and equipment to tools and more. But sometimes, these assets already exist at your business – you’ve just lost track of them, and again memory fails you.
What’s more, theft is easy if your company isn’t tracking its assets. First one item disappears, then another … suddenly it adds up to a big chunk of change.
With asset tracking software, you can see what assets you own at a glance – and where they are. Each asset has its own unique barcode label, which can be scanned for easy data entry and access. Items can be checked in, checked out, and attached to a unique record with a wide range of information including purchase date, location, initial cost, service record and more.
Think you need another expensive new tool? Check the software, and you just might find you already have one in the supply closet. This will eliminate unnecessary new purchases. Plus, it reduces – or eliminates – losses and theft, since items are checked out to specific employees who must be responsible for them.
Stop the loss or unnecessary purchase of a single piece of equipment, and you’ve paid for a bundle including the software and a mobile scanner/PDA, which starts at under $2,000.
- Supplies surprise, where does it all go?
To compete with the big boys, small businesses need to deliver their products and services fast. So employees need fast and easy access to parts and supplies. But who is keeping track of what items are actually needed? And are they all used on the job, or are they walking off to destinations unknown?
Even worse, parts can run out of stock when not closely monitored. This means customers are left waiting – and may go elsewhere. Or, your team may place an order for overnight delivery, which requires expensive shipping charges.
These problems can be eliminated with a simple inventory solution, which keeps count of supplies and accurately tracks them to a specific job or employee. As a result, you can experience a significant reduction in supplies costs, especially expensive shipping charges. Plus, parts can be accounted for, enhancing overall compliance. Best of all, customers are happier when their jobs can be completed quickly – thanks to immediate access to needed supplies.
It won’t take many cancelled overnight delivery charges to pay for this solution, which is less than $600.
- Stop overpaying for software
These days, even the smallest of business is concerned about owning the right number of software licenses. But fear of being out of compliance sometimes prompts management to purchase more licenses than are actually needed.
On the other hand, the difficulty of counting each and every application and tracking it manually makes following the law nearly impossibly for some businesses.
Kill two problems with one piece of software: an automated asset management system that makes it easy to track the number of current software licenses. In the long run, you will head off any unnecessary software purchases while also following the letter of the law.
There are a couple of excellent side benefits. First, the software can set up automated maintenance schedules for PCs, laptops, servers and more. Plus, by having accurate software license counts on hand, you’ll have the information to negotiate bulk pricing with vendors.
Avoid purchasing just one software license and you’ve paid for the software, which starts at around $600.
- Get better pricing from your vendors
No matter what a small business is buying, always ask for a discount. But it’s hard to receive preferred or bulk pricing without a little persuasion.
That’s where an automated inventory tracking system comes into play. With accurate information on inventory turn and sales, as well as forecasts for future needs, businesses can negotiate serious discounts from vendors.
A simple version of the software can be paid for with your first big negotiation success, since it costs just $600.
About The Author: As vice president of marketing for Wasp Barcode Technologies (www.waspbarcode.com), Grant Wickes sets the strategic direction and oversees the tactical execution of the company’s marketing programs. Wickes’ marketing and sales experience spans more than two decades, the majority of which has been spent growing small technology companies. Wasp Barcode Technologies has become the trusted source for productivity solutions for small businesses.