When you’re running a business, your main focus may be on optimizing your marketing and improving your rate of closing sales, but that’s not the only way to get a good return on your investment. Another way you can bump up your revenues is to trim your overhead costs, finding ways to reduce many of your expenses.
How to Increase Your Business Return on Investment
Although you may be baffled by how you can trim your expenses any further, considering we’re talking primarily about fixed expenses, there are some simple, ingenious ways to go about it.
1. Switch how you handle accounts payable.
By using ap automation— that is, accounts payable automation—your business can cut its operational costs. It’s costing you time and money to process your invoice manually.
2. Migrate to the cloud.
If you’re using an on-premise infrastructure for your computing needs, you could be paying too much for your IT. In addition, you’re probably not getting as much value for your money as you might think. By moving your business to the cloud, you’ll be able to cut down your IT costs, specifically the cost of administration and maintenance. With cloud computing, you won’t have to worry about installation, and your updates will be automated. Additionally, by migrating to the cloud, you’ll be able to enhance business continuity and the flexibility of all your business processes. If you have a seasonal business, you’ll also benefit from the scalability, which will allow you to reduce bandwidth costs during the slow season and increase it during the peak sales season.
3. Improve your business communications.
Upgrade your business to enhance business continuity, expand system capacity, and improve your employee’s ability to respond to customers whether your employees are at the office or on a business trip. One way to upgrade your business communications is by using IP telephony–IP stands for “Internet Protocol.”
Essentially, you’ll be replacing the circuit-switched connections of a traditional public-switched telephone system with a packet-switched connection. This will lower the cost of various types of information communication, for instance, voice and fax.
4. Reduce how much you’re paying for your office space.
In the Internet age, it isn’t necessary to pay the high cost of rent, utilities, and other office expenses. If you allow most of your staff to work from home, you can move to a smaller premise. In fact, you don’t even need an office. If you think it’s necessary for your business because you need to meet with clients, consider using a virtual office service that will provide you with a business address, a switchboard, and a meeting room when you need it. If you must have an office, then you can slash costs by finding ways to reduce utilities, for instance, using energy-conserving light bulbs.
5. Cut back on your staffing costs.
It’s possible that a large part of your business expenses comes from hiring full or part-time employees. One way to reduce some of your expenses would be to outsource a few tasks like accounting to an agency and your website-related tasks, like development, design, graphics, social media, and content creation to freelancers.
6. Slash your travel costs.
While you may not be able to eliminate travel costs entirely, relying on only virtual teleconferences for your face-to-face meetings, you can do quite a bit to reduce the rising cost of airline flights, rental cars, and hotels. Some ways to trim your travel budget include booking your trips in advance and using your rewards programs.
You can also avoid incidental fees, like seat upgrades or in-flight meals. Finally, by scheduling better, avoiding traveling during higher demand seasons, you won’t be paying for flight tickets and hotel accommodations when they’re at their highest.
Put Your Surplus Income to Good Use
When you take the time to think about it, you’ll be surprised at how many different ways there are to increase your business revenues by decreasing how much you spend on your overheads. Now, by maximizing your profitability and minimizing your expenses, your business will have begun to earn surplus cash.
Your final step, to put this money to good use, by diverting it into two separate funds: one, an emergency fund to handle any unexpected business slumps or market downturns; and, two, a growth fund to invest in new business opportunities when the time is right.