Small businesses often have tight margins so it can be a good idea to reduce your costs to maximise your profit. This will work well in some areas such as cycling to work or renting a smaller office. However, there are places where you should never cut corners in your small business.
Quality
You might make more money in the short term if you rush one job or use inferior quality materials, but it won’t work for you long term. Customers will think with their feet and stop using your company if they think you aren’t up to an acceptable standard. They will also tell people about their experience, and this could lose you business in the future.
If you offer top-quality goods and great service, you are more likely to get good reviews which will lead to more business. Quality is not a good place to cut corners.
IT
Most of your work will be done by computer, even if you are not in the IT industry. Orders might be e-mailed to you. You will set up meetings, send invoices, and keep track of your business through an IT system. You can’t afford for this to fail.
Buying good IT equipment such as Lenovo Office PCs might cost you initially, but they could save you a fortune in the long term. Once you have bought your IT equipment you will need to hire someone to maintain it for you and to fix any problems as soon as they go wrong. You can outsource this business so that it isn’t too expensive but having someone you can call if you have issues should make you more money than it costs you.
Accountancy
Getting your accounts wrong could cost you a small fortune and even put you out of business. Paying tax isn’t the fun side of the business but it must be done. Luckily you do not have to do it all yourself. Hire an accountant as soon as you set up and they will make sure you don’t miss any payments. If you feel confident you could do your accounts yourself and get an accountant to check your figures as this will work out cheaper for you. However, accountants can also tell you where the tax breaks are so their advice can save you money.
Insurance
You may not want to bother with insurance, especially if you think nothing bad will happen to you or your company. However, in business, you should expect the unexpected and be prepared. It can be a lot more expensive to pay for a court case or replace office equipment in the event of a fire or flood than paying for the insurance. It is not wise to cut corners on your insurance payments.
Now that you know where not to cut corners you can make sure that your business is safe in any eventuality. Now you can think about where money could be saved to make your business more efficient. Do you really need that second latte?
