Imagine your business is a shopping cart, and each time you spend $10 on something at the grocery store, its pocket change. But that's not the case for a business owner. If every purchase of $10 or less costs you $100 over time, then you need to shop smarter and do your math before buying anything new for your company." Which items are must-haves for small businesses in terms of cost-per-use efficiency? You'll also find some ideas on how to make these purchases as painless as possible so that when it comes down to crunch time, you're ready with all the information needed to make an informed decision.
Modern companies spend approximately $1.5 trillion annually on supplies and services. This can be compared to nearly $2 trillion a year spent by households in the United States. In the grand scheme of things, small businesses spend too much. Even though there are many ways to save money as a business owner, it's hard to do anything without knowing where you're spending your money. The first step to getting started is determining which items are necessary and which are not, since you will have to make less-than-ideal purchases.
What are some of the essentials that every business needs to purchase?
When it comes down to purchasing and servicing materials, small businesses spend a ton on paper. We have more than 220 per capita here in Michigan that use toner for the copying functions of their offices. This is the most used failure point for most small businesses. Paper usage is approximately $60 per employee per year. This represents 5 percent of their annual budget, but it's a common cost that has nowhere to go but up as consumers purchase more computer technology every year and companies continue to use paper as an "inexpensive" option for employee communication.
How do you determine the most cost-effective board of directors?
Many small businesses are created in homes, so the first step is to convert to office space, then rent more space than you need and hire a professional consultant to advise you on the best options. This person should be an expert at working with small businesses. From there, companies can begin to create diversity within their structure by incorporating a national sales force, regional sales representatives, a telemarketing service, or a sales-representative management software program that picks up the slack. These decisions must be made strategically. Don't make them alone.
What are some ways that small businesses can save money on travel or cut back on gas consumption?
Consider moving your business location. Just because you were successful in one location doesn't mean you will be successful in another. If the business has been operating in expensive real estate, then it may be a good idea to move to something less expensive, like an abandoned shopping center. That way, you'll have room to expand and no neighbors to worry about. Another way to eliminate travel is by conducting video conferences with qualified consultants and external vendors instead of flying them into your office for face-to-face meetings.
What is the most efficient way to cut back on paper usage?
The only person who can decide what's optimal for their business is an expert in the field. Those who are in the position to make those decisions should be consulting a professional consultant. A good consultant does not recommend a solution that will be too costly or will be an inconvenience at checkout time.
What is the biggest mistake that small businesses make when it comes to purchasing?
No matter how many times you get burned by vendors, you don't learn from your mistakes. That's why it's important to have someone else who knows more about your business and its needs involved in the decision-making process.
Conclusion
With any luck, these answers will help you to save money on paper and other supplies and services that are necessary for your business to thrive. Remember: You don't want to be in the position of having to make those hard decisions alone. Small businesses should take the time now before they become big businesses to find the best ways to save money and get the most out of their resources.
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