Finding Ways to Increase Your Bottom Line

Savings Ahead SignAs a business owner, you likely have one main objective–to sell your product.  Of course, you want to provide good customer service and to have satisfied clients.  You probably also hope that your employees will enjoy their jobs, do good work, and consider you a reasonable boss.

However, if you’re looking to increase your bottom line, there are several steps you can take:

1.  Raise the price of your product.  As inflation increases, it is reasonable to raise the price of your product.  If it is not a significant increase, most consumers won’t object.  You probably don’t want to do this frequently, but when it is warranted, raising the price is a good way to generate extra income.

2.  Reduce the cost of manufacturing.  Reducing the cost of manufacturing without lowering quality is also a possible option.  Many companies choose to move their manufacturing overseas where labor is cheaper, but business owner Jamey Bennett told USA Today that he moved his manufacturing back to the states because of too many headaches including middle of the night conference calls when his product was manufactured overseas.

3.  Reduce the cost of routine expenses.  People tend to set up their utilities and not think about them again.  The same can be true for your business.  When was the last time you compared rates on phone and Internet service?  Take the time to compare business electricity prices at Make It Cheaper.  You may be surprised that you can find lower rates now compared to what was the best price when you first signed up for service.

4.  Outsource some tasks.  There may also be some tasks that you can outsource that will free up your employees to do more important work that can help your bottom line.  While you don’t want to outsource all tasks, outsourcing some can pad your bottom line because you may be able to pay a lower hourly wage and not have to cover insurance, which can be costly.

There are many ways that business owners can improve their bottom line from increasing the price of their product to reducing manufacturing and everyday expenses.  The key is to keep exploring what options are available to you and to do this yearly.

Protect Your Business and Employees from Fire

As a business owner, you are probably well versed in lowering your bottom line and increasing sales.  You look at budgets, spreadsheets, and marketing reports much of the day.  You meet with clients and produce your product.  However, if you have one employee or more, do you give much thought to fire safety and prevention?  Chances are, this is not high on your list.

However, it should be because one fire could wipe out all that you have worked so hard to build.  Here are some ways to make your business safer when it comes to potential fires:

1.  Consult with the local fire department.  The Seattle Fire Department offers business owners assistant with developing fire evacuation plans as well as training their staff.  Many other fire departments across the country also offer this service.  Simply call your fire department to see if this option is available for your city.

2.  Invest in fire extinguishers.  If you have not already done so, one of the simplest things you can do to prevent a spreading fire is to invest in fire extinguishers from or another company.  Fire extinguishers are not that expensive, and they can prevent a fire from spreading and causing serious damage.

3.  Have regular fire evacuation drills.  Make sure after you develop an evacuation plan that your employees are familiar with what they have to do.  The best way is to have practice drills.  Yes, drills can take your employees away from their work, but practice is the only way everyone will learn what to do in the event of a fire.

4.  Make sure you have the appropriate insurance.  Your business is likely your greatest asset.  Make sure you protect it by being properly insured.  Take the time every year to review your policy and see if you need to update it or increase coverage.

Thankfully, business fires are rare, but there is always the possibility that one will happen.  You don’t want to jeopardize your business or your employees by not being prepared.  Take steps now so that if a fire does occur, you are prepared and can either stop it from spreading, or, if that is not an option, you can prevent serious injury or loss of life.

Photo by EyeNo

Are You Spending Too Much on Business Expenses?

With cash flows being down for many small businesses due to the economy, business owners are looking for ways to save on expenses.  However, it can be difficult to know if you’re spending too much on some expenses versus others, or if you can really get a better deal.

As such, here are some tips to see if you’re spending too much on your business expenses.

Business Office Supplies

Photo by 19melissa68

Get a Budget

Take a page out of personal finance and start a budget for your business.  First, you need to make sure that you have specific details on cash outflows, and what the categories of each line of spending are for.  Once you have the categories, you can look at your data from month to month.

Then look at the categories which make up the largest percentages of your spending.  Do categories such as printing and reproduction, office supplies, or utilities seem rather high? Are you paying an accountant when you can earn your online associates degree in accounting and do your own bookkeeping?  If so, chances are you are spending too much on your expenses.

Ways to Cut Costs

Once you’ve identified your highest expense categories, it’s time to look where you can trim.  The first step is to shop around to see if you can get a better deal on the products and services you normally buy.  The internet is a great place to start.

For printing and office supplies, there are a lot of online retailers that offer these services at very low costs.  See what you’re paying, and try out a few orders through the online company.  You may be surprised at the quality you get for the price.  For regular office supplies, check on Amazon or even office supply stores like Office Depot online. Many times the online prices are more competitive than in store prices.

You can even shop for utilities such as phone service online.  If you have 0800 telephone numbers, there are several sites that let you compare your options for pricing and services for these types of phone lines.  You can also look at VoIP services to see if you can save even more money compared to your local phone company.

Demand for Rental Property and Residential Contracting is Expanding

Guest post by Sara Mackey

As positive as recent economic data has been in the United States, all economists agree that a full recovery is not possible without significant improvement in the residential real estate market.  Banking foreclosures and qualifying for a mortgage with an adequate down payment are the obstacles at hand.  As a result, the rental and leasing business has grown materially, well above inherent cost structures, and where there is high demand for rentals, the need for residential contracting firms is also increasing.

Apartment Building

Photo by RenoTahoe

Is now the time to start your own residential contracting company?  The answer is undoubtedly “Yes”.  Timing can be everything for a new venture.  The key for any new firm is to gather new customers as quickly as possible at low cost and to build on those early successes going forward.  You also need to be passionate about being your own boss and be prepared for the time commitment involved.  Your relationship skills will be tested every day, as you deal with your customers and with family members that feel that you may have become obsessed with your new undertaking.

Starting a new business can be a very time-consuming effort, but the rewards are worthwhile if you are persistent and determined to accomplish things on your own.  Here are a few other pointers when starting a residential contracting firm:

  • Self-Assessment:  Now is the time to ask yourself and your family if you are ready to start your own company.  Time will be in small supply, as well as money for the short-term.  You will need discipline and an assortment of skills, although others can perform some of these tasks.  You, however, will handle the hiring and firing, new client acquisition, accounting, and advertising.  Timeliness and reliability are necessities in this industry, together with honesty.  Check your passion and desire, and act accordingly;
  • Industry Research:  Research building codes, local permit requirements, and learn from other firms how they conduct their businesses.  There are no shortcuts for experience, but counsel from industry “mentors” is highly advised;
  • Prepare a Business Plan:  You can get help for this effort, but you want to estimate in detail your equipment and staffing needs, state licensing requirements, insurance, website, and accounting/billing software needs.  Offset these projections with expected customer revenues to arrive at your base-line financial needs.  Investment capital will be needed to get started, and once you are up and running, you will also need working capital to cover operating deficits until you reach break-even and the delays in collecting from your clients.  Arranging sources of investment and working capital will demand a healthy portion of your overall effort;
  • Initial Marketing:  Create an attractive name for your business, and decide how you will gather potential customers, prepare estimates, and allocate resources for the work at hand.  A commercial vehicle with your information prominently displayed is a “must have”.

There is never a perfect time to start a new business, but the timing now seems appropriate.  Good Luck!