In One Small Step Can Change Your Life: The Kaizen Way, author Robert Maurer told the story of an employee who saw his metal shop coworkers throwing out scrap metal. When the company posted a suggestion box with a simple question, the worker submitted one to sell the scraps. The company implemented the idea and found an easy way to get more cash.
That small question? “Can you think of a very small step you might take to improve our process or product?” The company posted suggestion boxes everywhere including the warehouse, manufacturing, and wherever their employees worked. Rather than looking for big idea solutions, the company aimed small. It was easier for employees. Otherwise, the idea of trying to come up with a big one may have paralyzed them to the point they’d never submit a suggestion.
Another way to get more cash is to change services or revisit contacts can make a difference. A small business owner had been with a web hosting provider for five years when she noticed web hosting prices dropped. She decided to look for a new provider and cut her bill in half.
Since she had a small site, it wasn’t too much of a hassle to move her files to a new web host website. If you don’t want to move and you’re happy with your provider, ask for a lower rate or a more suitable plan. She opted not to negotiate since she was unhappy with the provider’s service.
As these examples show, cutting costs doesn’t have to be big. Your employees may find enough small things that add up to a chunk of savings. To top it off, you’re involving them and empowering them to make a difference. It also motivates employees and increase profits.
Here are eight simple ways to find more money in your business.
1. Renegotiate services.
Have you been using the same phone service and plan for years? Web host? Maybe it’s time to revisit a different plan or change companies. It could lead to big savings like one company that saved thousands of dollars to increase cash flow. How? By renegotiating phone plans.
2. Post a suggestion box.
Like the scrap metal employee came up with a simple way to make extra money, employees can come up with ingenious ideas for finding cost savings. Ask employees for small ways to improve processes and business.
3. Shop around for software.
Many companies offer a trial of their software to give you a chance to see if it meets your company’s needs. There are also websites like alternativeTo for comparing software. For example, you can search for Microsoft Office Word alternatives by platform and cost.
If you look into cloud-based apps, research the vendor’s security features. Not only do you need assurance the cloud service provider has a strong security process, but also train your employees on how to use the service. Let’s say you use Dropbox for storing and sharing files. You’ll want employees to know how to upload files in the most secure way. Files that aren’t made public can still be accessed by the public when not done right.
4. Cut down on paper.
Are you printing cover sheets with employees’ names to help figure out who printed what? You could save money on paper and ink costs by removing this convenient feature. It may be a little confusing in the beginning, but employees will adapt and know to pick up their printouts as soon as possible.
One company removed the cover sheet functionality and shaved printing costs. So employees had to work a little harder to find their stuff, but it wasn’t a problem because they made it a habit to get up and go to the printer soon after printing. You may cut paper further you do the next item.
5. Switch to electronic forms and filing.
Document and forms management has come a long way with the latest tools making it possible to convert paper forms into digital, fillable forms. Moving from paper to digital also speeds finding what you need as you can search files. The money you save should more than exceed the cost for the forms management software.
6. Lower fees temporarily.
In slow times, it may be necessary to cut fees rather than let a client go. This strengthens the business relationship and the client is more likely to tell others about you. This would only be a temporary measure to help clients in a bind. Some income is better than none.
7. Talk to vendors.
Ask vendors if they offer a discount for paying early. If they don’t, then wait as long as possible to make payments on time to keep cash flow balanced. This allows you to keep the money longer.
8. Barter in exchange for products and services.
Are you in need of products or services? What about finding a partner who may be willing to barter for products or services? If it goes well, you may have found a source for referrals.
By the way, the colleague who cut her web hosting bill? She saved $180 per year … at first. Her rate dropped again by almost half. It bumped up the savings to more than $250 per year. Her new provider automatically lowered the rate without being asked. Now that’s good customer service.
What other ways can you cut costs to find more cash for your small business?
Image credit: Marco Verch