When it comes to boosting profits, most small business owners think about raising prices or increasing sales. However, cutting expenses can be a critical component to the profit puzzle. Here are four ways to cut back on costs without sacrificing quality.
- Eliminate tasks and activities that don’t add value. Every dollar you save by eliminating the cost of things that don’t add value to your company or to your customer drops directly to your bottom line.
- Give your team a clearer picture on ways they can contribute to profitability. Every team member is an agent for increasing profitability. Empower them to be part of this search for ways to increase profitability.
- Feed your winners, starve your losers. This includes your marketing activities, your sales force, your general staff, your company initiatives, and your reporting. Measure results and cut your losers, then feed a portion of the saved time and money into your winners.
- Stabilize your production systems. This can help you reduce the need to stock so much inventory and raw materials -- which can be a drag on your cash flow and your gross profit margins.