In today’s marketplace, keeping business costs down can be difficult. But lowering costs and expenses is a very important part of helping a small business stay financially healthy. A slowing economy means the potential for business profits to be flat, and lower costs helps mitigate that problem. Not only can that help financially, but it can also increase peace of mind. If you own a small business, you may be wondering what you can do to ease some of your financial concerns.
Fortunately, there are a number of important business efficiencies that can help balance the scales. By focusing on improving productivity and creating additional operational output, a business can thrive more easily. That means you have the opportunity to keep your business leaner and fitter. When you do that, you spend less money on areas and options you don’t actually need. That can translate to big savings. Here are six business efficiencies to consider, so you can keep your company leaner.
1. Use a Payroll Tax Calculator
One of the areas where your small business might be spending too much time and energy is working on payroll taxes. The good news is that the right payroll tax calculator can help you figure out both the employer and employee payroll tax responsibility within a couple of mouse clicks. In fact, many online tools do the math for you, reducing the risks of paycheck mistakes or other payroll tax-related problems that can raise flags with Uncle Sam. A basic calculator makes it simple to figure out tax withholdings and deductions per state, and a top-notch tool will go the extra mile by handling more complicated items — like bonuses, garnishments, and 401(k) contributions.
In addition to an online calculator, you can use a payroll company to make sure employees get paid correctly and on time — which makes it easier to focus on other business needs. Payroll is one of the functions that a lot of smaller businesses outsource, because it can become complicated and stressful. A dedicated service solves that problem so you can feel confident that your tax filings and payments are being handled with accuracy.
2. Analyze All Your Processes
Another way to lean out your small business and make it more efficient is to analyze all your processes. There are very likely some areas where your company is “bloated,” and doing more than you need to be. Sometimes that can include redundancies, but it can also involve processes that can simply be made easier. Take a look through everything, and see what your small business is really doing. Do you need every process? Are some processes losing value, or costing too much time? Adjust accordingly.
3. Start From the Bottom Up
Your small business should be growing and developing. If it’s not, you want to take the time to find out why. To help lean out your company, and determine where changes need to be made, you want to start at the bottom. Why? Because that is the foundation of your company, and the building blocks for everything that comes after it. If you have a poor foundation, it is harder to build a quality company on top of it. Leaning out your processes from the ground up can help your company save money.
4. Empower Your Employees
Giving your employees power is an excellent way to make your company leaner. That works by allowing employees to make certain types of decisions, without needing to come to you for permission. While you don’t want your employees just doing whatever they want, many of them can make decisions in specific areas. Giving employees authority is also good for leaning-out your company because those employees don’t need additional supervision. That means you don’t need to hire more managers.
Employees who feel empowered are also generally willing to work harder for their employer. They feel like you trust them, and they want to continue to earn that trust. As such, they will try hard to make wise decisions, and they will focus on doing the right thing. As long as they understand where their authority stops, you can give employees a lot of opportunities to feel empowered. The vast majority of the time, they won’t let your small business down when you trust them to use their own judgement.
5. Eliminate Redundancy in Your Company
Redundancy is one of the biggest issues for any business. Even a company that is small can have processes and ways of doing things that create too much repetition. With that in mind, you want to look for areas where redundancy is an issue. Are there any places where two employees are doing the same activities? Do you have back-up processes that overlap too much? While some cross-checking is important, you can potentially save a lot of money by choosing to reduce redundant operations.
6. Use Free Options When You Can
Free options are great, when you can get them. A free payroll tax calculator, for example, can show you how much you should be paying. Even if you contract with a company to handle that for you, it’s important to know what kinds of payments to expect. Then you can feel more confident in making those payments. There are plenty of other free and low-cost options for other aspects of your company, too. When you choose these, you can lean your company out and spend less, for the quality and value you deserve.
7. Use Available Tools to Minimize Time Consumption
Many businesses must use financing in order to do business, and many times this means waiting on banks and lenders to approve loans, or even end payment. For example, LEONID is a government contract financing company that specializes in providing federal contract financing (lines of credit or term loans), AR Financing, or Invoice factoring to government contractors that are entrepreneurs, small- and medium-sized enterprises. Their money is entirely non-dilutive, with no personal promises. They are a Department of Defense Trusted Capital Provider, which gives their clients confidence in who they are working with. Utilizing companies like this can allow you to move on to the next project without worrying about where the money is coming from or about getting paid.
Operating an efficient small business takes time and effort, along with some trial and error. By paying close attention to how your business is growing, you can make your company leaner and more secure. That gives you more financial protection for the long-term, and reduces the risk of struggle in the future.
Infographic created by DFIN, a financial compliance software company