It’s smart to regularly evaluate your budget and see where savings can be had.
By Alexandra Walsh
If you own a small water well drilling business, you’ve probably spent the last several months worried about maintaining your business with social distancing, stay-at-home orders, and other rules in place due to the pandemic. But saving money is equally as important if you want to stay in business.
Here are some innovative ideas for cutting costs to increase your bottom line.
Price New Health Care Providers
Most employee benefits packages include some form of health care coverage. Salaried employees expect employers to provide for their health care needs, and it’s probably the right thing to do anyway. Unfortunately, it’s also getting more expensive each year.
Shopping around to compare plan costs is just one option. Investigating inventive solutions that might reduce overall program expense—and possibly also reduce employee premiums—can have a surprising effect.
For example, combining direct primary care—a system in which physicians charge a fixed monthly fee for care instead of billing insurance providers for each visit—with a high-deductible plan can sometimes save a company up to 15% compared to conventional health insurance.
Look for New Vendors
If you’ve been working with the same supply chain for years, you may be missing out on good bargains. While researching new vendors and wholesalers takes time, the cost savings can be enormous.
If you’re a longtime customer, you can also approach your current vendors about renegotiating your contracts. If they don’t want to lose an account, they may be willing to offer discounts or add-ons that save you significant money.
Rethink Workspace Needs
This one may not work for all of you in the groundwater industry, but depending on what you do, relocating to a smaller office space may save you money on rent (though you’ll be on the hook for moving expenses).
If you run a particularly small business or your company has locations in multiple towns or cities, it may not be economical to pay for an entire office space. Coworking offices are great options for salespeople, managers who travel regularly, or entire businesses if they’re run by a small team.
Mobile device usage, collaborative workstations, and multipurpose rooms (for example, conference rooms that double as break rooms) are all great news for rent-conscious business owners and executives. Redesigning your office around these and other space-efficient options allows you to do more with less—and even if you’re growing, forestall a move into a larger, costlier space.
Eliminate Unnecessary Perks
Small business owners may feel like they have to compete with large companies by offering benefits and extra amenities. While offering some perks is a nice way to treat your staff, most employees probably appreciate comprehensive benefits and time away from work more.
Review Utilities and Overhead
Programmable and smart thermostats can cut your climate control costs without compromising comfort. Use a programmable thermostat to customize your facility’s climate control schedule.
Besides your programmable or smart thermostat, consider passive energy-saving measures that reduce your climate control and lighting system workloads, like double paned windows or a solar water heater. If you work in an older structure, caulk and weatherstrip common areas of heat loss to create tight seals.
Before you start on an energy-saving project, determine whether it qualifies for local, state, or federal energy-efficiency tax credits. Energy-sapping appliances, insulation, and small-scale renewable energy projects often do.
Cutting down paper waste is good for your company’s bottom line, not to mention the environment.
Your company might pay for essential services like telecommunications, cloud storage, bookkeeping, and perhaps even legal support by means of monthly or annual plans. At a minimum, you should review these plans once a year to determine whether they are adequate for your needs.
Why not buy used items if and when it makes sense to do so? Depending on what your company does, your used buys might include:
- Office technology such as printers, copiers, and office furniture
- Personal technology such as refurbished smartphones, tablets, and laptops
- Vehicles such as company trucks and cars
- Drilling equipment
- Hand tools
- Storage equipment.
Streamline Your Marketing
If you haven’t analyzed your marketing mix recently, you may find you can reduce your expenses significantly. Calculate how much you spend on various forms of marketing:
- Public relations
- Social media marketing
- Search engine optimization
- Sponsored content
- Trade show appearances
- Direct mail.
Look for areas where you are investing significant money or staff hours that aren’t producing results. Once you identify wasteful marketing efforts, brainstorm ways to replace those with less expensive forms of marketing. For example, instead of paying to participate in a local event like a fair, can you take out an ad in a popular magazine?
Bank Accounts and Credit Cards
If you haven’t looked at your options for banking and credit cards recently, you may be losing significant money to fees or high interest rates. Take some time to explore your options and look for the following:
- A bank account set up specifically for small business owners
- A business credit card with cash back or rewards you can use for your business, such as airline miles
- Lower interest rates
- Checking accounts with rewards for signing up or spending a certain amount
- Point-of-sale options with built-in perks.
Cut Employees Hours
There may be employees at your company who would transition to part-time (or even just four days a week) if they were given the opportunity.
Now this can be a touchy subject for an employee to bring up themselves, but if you as a business owner make it known you’re open to shorter work weeks for those who might want or need them, this can save you from paying those full-time wages without having to lose a good team member (and their work productivity) completely.
Retain Your Best Employees
A high-performing employee, especially one who is an asset to your company culture, is a valuable asset. Not only that, it’s a valuable relationship.
Costs associated with the hiring process can be high. If you have a solid team member, do what you can to keep them. Check in regularly and take the time to understand what they’re looking for in terms of career trajectory and opportunities for growth. It will save a lot in the long run.
Cutting costs shouldn’t just be a periodic exercise to improve your bottom line.
Thinking outside the box will help you to lower your overhead and compete in a crowded marketplace. It will also reduce the likelihood that you’ll run into trouble with cash flow in the future.
At least once a quarter, take time to evaluate your budget and look for ways to reduce expenses for your business.
Virtually any business ledgers contain at least some financial fat to trim. Even if you think you’ve plucked all the low-hanging fruit, it may be worth your while to take another look. It won’t cost you anything and it could produce a significant payoff in time.
So what are you doing to cut your company’s expenses and grow its bottom line?