One of the most challenging aspects of running a business is managing cash flow. Thanks to climbing costs, this is especially true today. A business owner can do a great job in consistently maintaining the money deposited into the bank account and paying expenses and employees. Yet, it can run into something like a damaged roof that can throw cash flow out of sync.
We've given you tips on how to find more cash in your business, which don't require bringing in new customers. For more ideas, see 10 ways to improve cash flow from The Globe and Mail, which suggests ordering online and reviewing cell phone plans. Cell phone bills can, indeed, be a big factor. One manager found thousands of dollars in savings by changing employees' phone plans.
We asked colleagues to share ways companies can find more cash savings. Here are their suggestions.
1. Switch between in-source and outsource. Some clever companies play the 'outsource/ in-source' game. Know how much you spend, for example, on janitorial services. Much of those costs relate to human capital (salaries, benefits, training, etc.). You contract with an outside company ... for a while.
Then, end the contract knowing what you spent, and do a direct hire for a while. Repeat and outsource again. This drives down overall costs and applies to many industries and jobs. Unfortunately, the downside is letting the internal employee go unless you let the employee know up front that this is a temporary job.
2. Control the temperature. Too cold. Too hot. Public thermostats that allow anyone to change them drive up costs. Consider taking away that control and determining temperature settings for the year.
3. Review lighting. One company removed light bulbs to cut down on lighting. (It had four lights per fixture and took out one or two.) It didn't affect employees because it went from being bright to comfortable. Do lights stay on overnight? Look into energy saving options and motion lighting for bathrooms that automatically switch on when people enter.
4. Change servers and apps. One company saved a bundle by moving its company off Exchange servers and onto Google Apps. Here is a list of web and business tools to consider.
5. Cut back on advertising. Referrals cost nothing except providing great customer service to your clients. There are more affordable and targeted options for promoting your business that reach your audience rather than a general one.
In a previous post, we shared the story about the lawyer who kept increasing advertising along with his revenue. He stopped advertising and cut back on clients, which gave him more time to spend with each one. As a result, they valued his services and let others know about him.
6. Improve inventory management. Inventory of slow moving items or items not used much add up. Move toward a "just in time" approach to minimize inventory and stocking costs.
We've talked about outsourcing before, and so does The Globe and Mail article. ("Spend time on valuable tasks, and outsource the rest.") It's worth repeating that it pays off to outsourcing some tasks -- not just for accounting and legal activities.
Simple example: A colleague is working on invitations for a second event. First time, she addressed all the envelopes herself. Second time, she decided to let the invitation company do it. While she could do it, she saved several hours of work that she used to focus on what she does best and faster.
What other ways can companies save money? What have you done that worked well for you? What were the results?
What Our Clients Are Saying
- George Del Toro,
We were funded [in 10 days] (the approval process was very smooth). The way I spend my time has changed dramatically since then. I can spend as much time as I need visiting with customers and out on the field... In closing I would like to tell you that Capital Solutions has made it possible for GDT Well Service, Inc. to triple (300%) its business in the last year, without any of the "growing pains".
GDT Well Service
- Keri Gray,
The HUGE difference I found since we are working with you... is in the day-to-day life... Since Capital Solutions is funding us there is no "fear"... when I talk to a vendor or need to make payroll. You guys have also bent over backwards... to make it work for us. I really appreciate that.
- Brenda and Mark Neufeld,
In our very first conversation I noticed that you not only understood our situation, but also the Oil & Gas trade. Capital Solutions has been an invaluable help... We have grown our business exponentially thanks to you. I can now probably qualify for a traditional line of credit (...but I'm not sure I want to).
B.N.M. Piloting Services