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How to Lower Your Small Business’s Operating Costs

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StrategyDriven Managing Your Finances Article |Operating costs |How to Lower Your Small Business's Operating CostsIt can be difficult yet rewarding to keep a small business up and running. There’s a lot of work that goes into keeping things out of the red.

Whether you’re looking to reopening or just need to cut down your current operating costs, there’s much a small business owner can do. Keeping your operating costs down is the number one thing any business can do to help ensure they can stay in the green and continue to grow.

Would you love to spend less? Read on and we’ll walk you through a few key suggestions on how to cut costs and run smoother as an operation.

Embrace New Technologies

Are you still running archaic old systems and doing everything by hand? Isn’t it time to take a few steps forward and be part of the modern age?

There so many different software programs out there that can help to streamline your business operations. What area of your business operation is slowing you down? There is more than likely a program or online system out there that can help you out.

Accounting, website hosting, marketing, payroll, on and on. If you have a problem, there’s probably a technical solution that you can embrace. From the TurboTax to the free paystub generator, someone out there has created a solution for you.

Why embrace tech? Because tech creates efficiency. A computer can do something at triple the speed we can and often at a higher rate of accuracy. If you can reduce the need for direct labor, you’ll cut back on the time needed for various tasks.

You’ll also be able to eliminate some needed manpower and that can decrease the amount of money you’re putting into wages as well. Tech might even be able to improve the way you approach certain processes in your business, cutting out unneeded steps and providing cheaper alternatives.

Consider Outsourcing

It can cost a lot to keep employees on your payroll the whole year-round. On top of wages, you’ve got health insurance and various budgets to worry about. It might be enough to sink your whole budget outright.

It doesn’t have to be, however. If there are certain departments that you don’t really need to have year-round, you could always outsource them. Many companies do this for a variety of departments: tax accounting, human relations, or even customer service.

Instead of hiring someone full-time, outsourcing allows you to pay for these services only when you need them. That can greatly help to lower your overall cost and to raise the efficiency of each dollar that you spend.

Advertising and marketing is another area that you could benefit from outsourcing. For many business owners, running an entire marketing department isn’t worth the investment that it provides. It can be a real headache.

However, outsourcing your marketing and advertising needs to another company can help get the results you want at a fraction of the cost. This can really pay off as time goes by.

Look for Better Rates

Have you been working with the same shipping company for years? Maybe you’re not doing the work at finding a business partner who will really provide you with the kinds of prices you need to stay profitable.

One way to cut operating costs is to take a serious look at your vendors list. Where are you spending the most money, and might it be possible to get the same product or service from another entity for cheaper?

Even if you’re considering leaving, the current vendors you work with might consider negotiating down in order to ensure you’ll stick around as a client of theirs. If you compare prices from different vendors, you might be able to pit them against one another and get them to bring the price down.

Getting new quotes if it’s been a while since you’ve done this kind of research can ensure you’re getting the price you really deserve.

Create a Green Workspace

Did you know that creating a green workspace can do more than helping out the planet? It can also provide a positive impact on your bottom line.

It’s true! One of the benefits of many green practices is that they are more energy-efficient. Energy efficiency as it relates to your budget means cheaper bills.

Switch out all the light bulbs in your office for green-friendly fluorescent lighting and you’ll be surprised at how much you save on a yearly basis. Improving your heating and cooling systems cans also help to shave dollars off.

If you can cut your office’s reliance on disposal products you’ll also be able to save money there. Recycling and reusing products lessen the need to buy more. Encouraging multi-use water bottles, mugs, plates, and so forth will help Earth and help your wallet.

Swapping back to a normal coffee pot as opposed to those single-use coffee cups can provide big savings as well. A normal tin of coffee can produce hundreds of cups of coffee as opposed to the very few that a pack of cups will create for the same price.

It may be difficult to get your team to adjust to these kinds of changes right away. With a little work, however, you can create great change and cut some of your costs.

Learning to Lower Your Operating Costs

It can be hard to run a small business, especially in the current climate. However, embracing some of the above tips and tricks can help you to lower your current operating costs.

If you can successfully keep these costs down, you’ll be well on your way to a brighter tomorrow. Need more financial advice for the office? Keep scrolling our blog for more.

In-House or Outsourced IT: Which Is Best for Your Business?

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StrategyDriven Managing Your Business Article |In-house or Outsourced IT|In-House or Outsourced IT: Which Is Best for Your Business?Presently, IT businesses have a lot of requirements and various tasks to be done from design, content creation up to development, marketing, and administrative work. Every task is important and requires human resources. The main question is whether to hire a full-time in-house team or outsource and bring in the experts only when it’s necessary?

In-house vs. Outsourced IT: What’s the difference?

The insourcing or in-house team is a practice when the work and tasks are performed within the operational infrastructure of the company. While outsourcing is a process of contracting experts, who are not affiliated with the organization, for completing specific tasks.

The main difference between the approaches is the way tasks, projects, and work are divided between the departments for strategic purposes. So, what is best for your company: an in-house or outsourced team? Both approaches have their own benefits and limitations. Let’s get to the bottom of the beneficial and negative impacts of each practice.

In-house IT team: Benefits and Limitations

Hiring employees to your in-house IT team, the huge advantage is that you can train them to your business’s specific needs, and the workers are always available. When interviewing the candidates, you choose only those who suit the requisite level of skills, knowledge, experience. Thus, you control, monitor, and track all the processes of hiring and work.

The deep understanding is the next advantage. The office workers know the culture of the company and are aware of all project aspects and business objectives. Besides that, they work with the project from the very beginning that means they know it in detail. Thus, the team can start to work immediately without a need to get familiar with it.

The high quality is an unquestionable advantage of insourcing that stems from the previous issues. When you build the in-house team, you can be sure that they will do their best, and you’ll get the results that suit your expectations.

The main drawbacks of hiring office workers can mainly relate to the initial financial outlay. Thus, you need to train the newbies of the team, and after you need to constantly update their knowledge and skills. That can be a costly affair.

That’s saying nothing about the regular salary with the full pack of employee benefits, including vacation, sick leaves, and so on. Besides, it doesn’t matter if there is a task for a worker or not, you need to pay a salary anyway.

Absence issues are the next pitfalls to mention. In case your team member is sick or just leaves the company, some time along with the money is needed on new hiring or endure project pauses.

Outsourced IT team: Benefits and Limitations

Due to the Deloitte global outsourcing survey made in 2016, there are two primary reasons companies outsource:

  • to cut costs;
  • to free the in-house team to focus on core business objectives.

These are the main advantages though. No need to pay high salaries or equip the workers. You can bring in the outsourcing developer, writer, designer, etc. with a specific skill set to take a certain task only.

That gives time for your full-time staff to complete and focus on core business functions. Outsourcing gives you access to the huge talent pool. Not only can you hire specialists all over the globe, but also the rates of overseas professionals can be lower.

The biggest cons of outsourcing IT teams is the poor quality of work and management issues. It can be a challenge to find a freelancer to meet the expectations and to accomplish the task in time.

Bottom line

Today the economic situation makes businesses more flexible and search for new approaches to stay afloat and competitive. Facing the choice between the in-house and outsourced team, it’s evident that there is no one-size-fits-all solution to this dilemma. When dealing with the right in-house IT team, the time, patience, and diligence is required. Also, you should clearly understand what skills are necessary for the business to be successful in the long term. In its turn, outsourcing can be a more cost-effective and immediate solution. However, as evidenced in practice, the best way is to combine these two approaches. Take the most important roles in-house, delegating some tasks like guest writing, graphic design, problem troubleshooting, etc. on-call to make workflows more efficient without additional expenses added.

About the Author

StrategyDriven Expert Contributor | Alexey KutsenkoAlexey Kutsenko is CMO at DDI Development company, that provides custom web & development services to worldwide clients. Alexey has a vast experience in building marketing strategies for various clients, defining the client’s needs, and leading digital marketing strategies in the company.

Is Your Business Ready to Hire a Small Batch Co-Packer?

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StrategyDriven Managing Your Business Article |small batch co-packer |Is Your Business Ready to Hire a Small Batch Co-Packer?Your food products may be gaining traction in the marketplace. Now is the perfect time to scale, but you have to find out the best way to do that.

It can be difficult to know if your business is ready to hire a small batch co-packer or not. What does a food co-packer do and how do you know if it’s time to hire one?

Keep reading to find out.

What Does a Food Co-Packer Do?

A food co-packer is also called a food contract packer. They are an existing food manufacturing plant that you contract with to produce your food product.

Many small consumer packaged goods companies will use food co-packers as a way to outsource food production.
This can be a game-changer for small businesses because it allows them to focus on the operational side of the business, and marketing and sales.

The fees for a food co-packer will depend on a number of variables. The size of the order, the ingredients involved, the co-packer’s labor and production costs are the main variables.

When you work with a small batch co-packer, you will have several advantages. You’ll be able to maintain high standards of quality. You’ll also have lower minimum order standards to meet.

This can be a great step if you want to move your business out of your small kitchen and you’re not at the point where you need to place a huge amount of orders.

How to Know if You Need a Food Co-Packer

A food co-packer can be a great asset to have if you are ready to scale up your business. How can you be sure that this is the right time to create a partnership with a food co-packer?

Here are some signs that you’re ready to take the next step in growing your food business.

You’re at Capacity

Have you taken your own manufacturing capabilities to the brink? You’ll find that you can only support a limited number of sales.

If you’re at the point where you have more demand for your products than you can handle, then it’s time to find a small batch co-packer.

You Can Scale Your Recipe

You may have initially developed your recipe in a tiny kitchen. You were able to scale it to satisfy more customers and still retain the quality of the final product.

Consumers are demanding healthy food. If your product falls in this category, you need to make sure that your recipe can handle large production runs with healthy, natural ingredients.

When you created your recipe, you may have used approximate measurements and still had great results. It’s much different working with a food manufacturer.

You have to give the manufacturer precise measurements to ensure quality. You have to do the same with cooking times and temperatures. Your recipe should deliver the same exact result no matter who the manufacturer is and which employee is managing production.

Sales Demand

You may be at capacity right now. Do you expect your sales to grow over time? Are your sales seasonal? Co-packers require a minimum run to make manufacturing your product profitable for them.

You may be able to try a test run of 1,000 units with a small batch co-packer to see how fast you sell the product.
That’s only a viable option if your product has a long shelf-life. Keep in mind that you’ll need to absorb storage costs if your sales slow below your projections.

If your product has a short shelf-life, your sales projections have to be as precise as your recipe.

You Have Capital

For businesses that have a significant amount of cash set aside, you can afford to take a financial risk and hire a co-packer.

There are other costs involved in co-packing that can make it challenging. You may have to pay research and development costs to the manufacturer. They will improve the recipe and give it a longer shelf-life.

There may be additional costs if your co-packer supplies the ingredients. At the same time, you may be able to save money if they provide the ingredients because they get a better volume discount.

A food co-packer requires significant investment. You want to make sure that you understand the risks involved before you hire one and you have enough capital on hand.

How to Find a Co-Packer

Do you think that your business is ready to work with a small batch co-packer? You have to find the right food co-packer to work with.

You should start by researching co-packers in your area. Talk to other food producers in your area and ask them how they manufacture their products.

You need to make sure that you find a co-packer that’s the perfect size. A co-packer that’s too large will be difficult to maintain. You’ll outgrow one that’s too small.

You’ll start to understand how food co-packers work and what you need to look for in a co-packer agreement.
The most important thing to know is that you cannot rush the process. Expect to invest at least six months before making a final decision.

A Small Batch Co-Packer Helps Your Business Grow

As a food business, you have to walk a very thin line between having enough inventory and having enough sales to move inventory.

That makes growing a food business a challenge. If you grow your capacity too fast, you don’t have the sales to support it. Grow your sales to fast, you have customers waiting for your product.

Both options can cost money. The best way to grow is to use a small batch co-packer, which gives you more capacity, but not too much. You also maintain quality as you scale your recipe up.

Finding the right small batch co-packer is a big step. You have to know what questions to ask and understand how co-packers work.

Be sure to visit this site often for more business and leadership insights.

Bootstrap your online business – Top tips to stretch your start up budget

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StrategyDriven Starting Your Business Article |Bootstrap your Business| Bootstrap your online business - Top tips to stretch your start up budgetStarting up an online business in today’s economy is no easy feat, as you’ve already got hundreds of thousands – if not millions – of other businesses already established and have the upper hand on you. However, this doesn’t mean it’s impossible by any sense of the word. You just have to be clever with your process so that you don’t blow your budget, you stand out from the crowd and most importantly, you hit the ground running. Check out these top tips to stretch your start up budget.

First thing’s first, you’ll need to build your website and the first question you’ll need to ask yourself is what kind of hosting to go for. There are pros and cons with each, so here’s a handy piece on VPS hosting vs dedicated hosting. From there you can choose which will suit your needs and your budget best.

Do the marketing yourself – it will save you tonnes of money

Marketing is a huge part in raising a business from the ground. After all, how else would people know you exist?! A dedicated marketing team can really help boost the online presence of a business but unfortunately, that’s also a rather expensive option. Doing the marketing yourself will help keep back a lot of your budget.

There are a few things that you may want to consider spending a small amount of your budget on:
Marketing books to improve your knowledge and skills. Amazon is loaded with books for each platform and yes – all of them are important!

Remember to spend a little of your budget on Google Ads campaigns – Google can really help boost your reach!
Pay the monthly fee for programs such as Adobe to create graphics and mailers for your marketing – it will make a huge difference to the quality!

Outsource rather than hire

You will undoubtedly need a team of people to help lift your business from the ground, but when you don’t have a large budget it can be difficult to employ people for long periods of time. That’s where outsourcing comes in, and it can be a very effective way of having work completed without the dedication of an employee you need to pay every week/month.

You can list the jobs you need fulfilling on websites like Upwork and Fiverr, and let applicants come to you with their skills, history and also their price demand. You can then choose the right price and skillset for your budget. The beauty of outsourcing is that once the work is done, you can go your separate ways. However, that’s not to say that in the future you won’t collaborate again!

Use influencers

Influencers play a huge role in purchase decisions on the internet, and that’s why they’re so effective for new businesses like yourself to use. Think of your favourite influencer. If they were to say, talk about the latest gadget that’s well within your interests, you’d at least check it out with a possibility of buying, right?

Browse Instagram for influencers within your business niche and contact them for their price list. Sometimes, a simple quid pro quo situation is all that’s required for an influencer to promote your business. For example, if you’re selling a particular product online, why not send them a sample pack to test, review and keep? It’s an extremely effective way of getting your name out there for a minimal cost.

Work from home rather than rent an office space

Another expense that you could eliminate is the rent you’d spend on an office space. The beauty of an online business is that you have the option to work from anywhere in the world. Load up yours and your colleagues (if any) computers or laptops with all of the necessary programs you’ll need and save your business’s budget by working from home!

Working from home can be difficult as it’s easy to become distracted and neglect your working duties. Creating a space in your home dedicated to working will help eliminate this issue. Why not check out these fantastic ways of making your home office the perfect place to work.

Starting an online business with a very minimal budget is hard work but very doable! Follow these tips and you’ll be well on your way to becoming an online business that everyone thinks of!

4 Services Small Businesses Can Outsource

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StrategyDriven Managing Your Business Article | 4 Services Small Businesses Can OutsourceRunning a small business requires wearing a lot of different hats. You don’t have to do everything yourself or hire full-time staff to take care of all the daily tasks needed to keep your business going. Here are four services to consider outsourcing.

1. Technological Support

If you use any technology to operate your business, even if it’s just website maintenance and email, you need some type of IT support. It may not be cost effective to have your own team on staff, though. IT outsourcing can help you manage your technical infrastructure and keep everything running smoothly.

2. Janitorial Services

When you have a brick-and-mortar location, you want to keep it clean to protect yourself, your employees and your customers. You can ensure that regular cleaning happens when you enlist the help of janitorial services Minneapolis. You can set up a schedule that works best for your business.

3. Accounting

You hope that all areas of your business run well, but one area you need to be as close to perfect as possible is accounting. Accounting helps you keep track of payroll, revenue, expenditures and taxes. You can use payroll software for basic functions, but hiring outside experts can help you avoid costly mistakes.

4. Marketing

Analyzing the marketing strategies that will work best for your particular business can be time-consuming. That’s why it makes sense to outsource your marketing to a team of professionals. Marketing specialists can focus on finding the best way to reach new customers and keep your current customers informed. This releases you to have the time you need to focus on what you do best.

Part of running a small business is making sure everything is taken care of. Instead of trying to add a lot of employees to the payroll, try outsourcing as many services as possible.