The Cost of Doing Business
In any enterprise, profit is always a balance between the income generated from sales, and the expenses of doing those sales. In a perfect world, there would be no operating costs, so that all profit can go straight to the company coffers.
Unfortunately, back in the real world, the cost of doing business has a tendency to balloon over time. The prices of raw materials and oil can come up, impacting supply and delivery costs. Staff climb up the corporate ladder, get raises and perks, and must be paid bonuses to stay happy. The market can fluctuate and leave you with a warehouse full of products that just lost half their value.
To remain profitable, the formula is simple: earn more than what you spend on production. And yet, the reality is often much more complicated, thanks to the aforementioned factors. To stay above the red, use these business techniques to lower your operating costs.
Teleconferencing
Instead of spending money on airline travel and gas, tap the power of videoconferencing. The prices of teleconferencing tools have gone down in recent years, enough to be affordable for SMEs. Solutions from leading brands like Microsoft, Cisco and Logitech enable you to conduct meetings without flying up to Seattle from your Phoenix corporate housing, or spending 8 hours on the interstate.
This can apply for both internal meetings and sales calls. Rather than sending your sales execs on a long drive to a potential client, have them do a virtual sales call first. This is convenient for both you and the customer, as he or she can just log on to Skype and listen to the pitch, without being bothered to get out of their desks. Only when the order is confirmed or the client is sufficiently large enough is it justified to send your sales reps in person.
Cloud-based tools
Hardware and software are two of the major expenses in the office. You need to purchase legitimate copies of an expensive program such as Adobe, and the hardware like a Mac to run them.
In recent years, however, applications that run on the “cloud” or the Internet have begun to sprung up. These programs are priced lower, as the software stays on a central server and you don’t install it on your computer. And as they run on the cloud, they have lower requirements, so you can use them on lower-spec machines.
Newer equipment
Replacing old office electronics can be a major pain in the wallet. And yet, then can save you more in the long run. Instead of sticking to that old ink-jet printer or air-conditioning unit, replace them once they get past their service lives. Newer equipment tend to be more efficient in terms of energy and maintenance, thus saving you more money per year on power and upkeep costs. Always think of the long-term benefit, not just the short-term advantage.
This entry was posted on Monday, October 10th, 2011 at 1:24 am, filed under Business, and is . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.