By Julie Gallaher on Dec 31, 2022
We all like making money. But while trying to increase your sales, don’t forget that it’s just as important to reduce business costs.
Ben Franklin is famous for espousing that “A penny saved is a penny earned,” but we aren’t talking pennies. You can save thousands every year with a bit of help.
Let’s examine how businesses lose money every day, every month, year after year.
The bills roll in every month, and most of us just pay them. We are so used to them that we usually don’t examine them in any detail every month. But that doesn’t mean your monthly bills are correct.
There’s a good chance you are paying more for some of your regular services than your competitors are. Maybe that doesn’t make a big difference in a month, but as the months roll by, you can see your competitive edge start to slip particularly if you are overpaying for multiple services.
Even if your rate is ok, that doesn’t mean you can trust your monthly bills. They are often full of mistakes. And mistakes are much more frequent than you probably think. For example, did you know that around 85% of telecom bills contain mistakes? 85%!
That level of mistakes can have you paying up to 20% more than you should each and every month.
A Gartner study called North American MSBs Seek Cost-Saving Opportunities reports that “Telecom bills for voice and data are often riddled with errors, not discovered for many years.”
Utility companies, banks and other companies make a fortune on late fees. And often you didn’t even know you were late because of bizarre billing cycles and other known triggers. Check your monthly bills. Are there fees that keep appearing that you don’t understand? They may be late fees you don’t even know you have been paying.
Telecom bills are just one example. There is a saying that “What’s inspected is respected.” Make sure you are checking your bills. It’s a basic go reduce business costs.
Is your business growing? Maybe you started out with you and your partner drawing up a plan on a napkin in a diner. But not you have employees, partners, a whole lot more vendors and a bigger space.
Now that your situation has changed, you will want to review your various payment plans from utilities to printers, copiers and scanners. The bigger your company grows, the more likely you are to become eligible for more favorable rates. If you are using a lot more quantity, it’s time to renegotiate. Once again, if you don’t, you are putting your company at a competitive disadvantage.
A lot of business services are negotiable. But that doesn’t mean that everyone is a good negotiator.
Even if your company has not grown or changed, every once in awhile approach your vendors and their competitors to see if you can score better rates. When it comes to reducing your business costs, you should not just assume that nothing can be done.
Another source for errors and lost money is mistakes on meter readings. Inaccurate meter readings and common, and they could be costing your company thousands of dollars each year. For example, not that long about over 7,000 utility customers in Austin were compensated for excess payments made due to inaccurate meter readings.
But it’s hard to check on your meter readings yourself, and you can’t expect the utility companies to diligently pursue mistakes that are to their benefit. But it needs to be done to reduce business costs.
It’s great to get top level service, but do you really need all the bells and whistles you have been paying for? It’s not great service if you aren’t even using it. Don’t pay for what you don’t use. Check all your services and make sure you aren’t paying for more than what you need. It may make sense to change to a different plan.
There are many tax exemptions designed to help businesses like yours. If you are doing your own taxes or have an unsophisticated tax preparer, you may be missing some of these or you may not be claiming the full amount to which you are entitled. As just one example, you may want to check whether or not you received the exemption to which you were entitled through the Employee Retention Credit related to Covid relief.
Keeping your costs down is just as important as making sales. And it can be just as complicated. Don’t let your competitors pull ahead because they are better at watching their expenditures.
Now Umbrella Local offers uSponsor, a service by which our cost reduction experts can help you reduce your business costs across the board. Don’t pay more than you have to. Set up a free business cost reduction consultation by calling (866) 760-2638 or completing this form on our website.
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