While many businesses prioritize making money, there is a lot of potential to be had in strategies that increase profit by saving money too. Money-saving strategies that increase profit can benefit your business in many other ways as well, from saving on cost to increasing employee productivity and aligning to a bigger goal.
Depending on your company’s current spending habits, you will need to instill new financial goals, determination, and alignment with the entire business. Saving money allows your business to accumulate funds to increase profit margins, reduce debt and move towards more financial freedom. The extra funds can be used for many different things, for example, as an emergency fund, for renovations, to increase peace of mind and stability, reward your staff and reinvest back into the business in a more impactful way.
7 strategies to increase profit without selling more
Regardless of the reason why, or whether you are a large enterprise or a small start-up, every business could do with introducing money-saving strategies to increase profit margins.
#1 Review the business finances
Just like you would with your accounts, sit down with the relevant members of your accounts team and review the financial state of the business. Take a good look at what money the company brings in, which departments are meeting their goals and which are not. Look at what outgoings you are paying for which are unnecessary, and which ones you could reduce to increase profit; for example, are all the travel expenses needed? This is crucial when you value a business as well.
When you have a better idea of where you are at, and how much you can afford to save in order to increase profit, it is important to write it down and set out a bigger financial goal. This will be able to break up into smaller, actionable steps that everyone in the business can align to and work towards together. It might help to make smaller milestones along the way, and use incentives to keep staff members motivated to help the business reach the new goals.
#2 Go green
Green is the way forward, not only to help the planet but also your finances and your brand image. Going green can be a great way to save on costs, as many incentives are driving companies to change their ways. Here are a few ways your business can go green and save money at the same time:
- Switch to energy-saving bulbs and put them on a timer so they turn off when a room is not being used
- Ask employees to unplug devices when they are not being used, or for example, if a device is fully charged
- Install energy monitoring systems such as smart meters
- Replace traditional marketing methods with online marketing
- Invest in recycled office supplies
- Encourage the whole business to adopt environmentally friendly practices in their everyday life
#3 Develop staff in-house
Developing staff in-house is a great way to save money, as well as push your business forward to increase profit margins in myriad other potential ways. When you train staff in-house, you are able to train them in alignment with your business and your ways of working. Whether you are developing existing staff or hiring an eager employee who is new in the industry, you can significantly save on costs by training in-house, as it boosts your reputation, attracts and retains valuable employees, and encourages staff to be productive and motivated towards the bigger business goals.
#4 Review internal processes
Sometimes, it’s not just the costs that you can physically see, like an employee or office supplies, that cost you money. On occasion, the way in which the company works can cost you more than necessary and have an undermining impact on your efforts to increase profit.
When looking to save on costs, reviewing your internal processes can be a great way to identify things that are no longer serving your business, skill gaps, and equipment delays. It could be that not enough staff are trained in a particular area, which is slowing down the supply chain you depend on to increase profit. It could be that your staff use 5 systems to complete a task when it can be condensed into 2.
It could also be that there are too many meetings each week that don’t always need to happen so frequently. Not only does this enable you to be a good manager, and look after your staff, but also see where processes can be improved to save on costs and increase profit — and doubtless get applause from your staff as well!
#5 Review all suppliers and contracts
It is important that you regularly review all your suppliers and contracts, whether that’s with your landlord or phone company, to ensure you are getting the most value for your money, and at a reduced rate. Don’t be afraid to negotiate for better prices and regularly shop around for better deals because your business could be saving a significant amount of money and increase profit as a result. Research the best mobile networks, the energy tariffs that supply your office with gas and electricity, move customer support calls to VoIP or Skype phone services, and see if you can negotiate a lower rent.
#6 Organic marketing growth
The majority of users are now online when looking for new goods and services, which means you want to ensure your business is in front of their eyes. The best, and most cost-effective way to do this is to invest in growing your organic marketing strategies to increase profit.
From SEO to social media, building your online presence can bring you thousands of organic (free) traffic with just a little knowledge, time, and consistency. This consists of creating valuable content in the form of Instagram posts, Reel, TikTok videos, and blog posts. Members in-house can be trained and don’t cost extra like Facebook Ads or Google Ads do.
#7 Outsource
Outsourcing working can be a great way to obtain the skill necessary to drive business growth and increase profit, at a fraction of the cost. This is because you are able to pay someone to do what you need to do, as opposed to paying someone a full-time salary and benefits. You can call on different expertise as and when you need it, which is especially helpful when your business is growing and you quickly need to evolve your strategy.
Conclusion
Saving money within your business to increase profit margins will take the time upfront, but the effort is worthwhile.
