There are two ways for a business to increase their bottom line, increase revenues or reduce costs. A simplified bottom line follow this basic equation: Revenues – Expenses = Profit. Most articles out there will attempt to tackle different strategies to increase revenues. It’s much more popular to offer a ton of subjects. However, I decided to look at the other element in the equation and attempt to create real value for your startup.
So let’s talk costs and how to cut them. Most entrepreneurs quickly learn that their major expenses typically fall into one of these three categories: Staff, Office Space and Marketing & Advertising. This presents the business owner with a significant challenge. Cutting two of these three can seriously harm the moral and the revenues of his or her business venture.
Layoffs get major media exposure when large corporations take the route of slimming down their teams. After years of bad hiring practices and ineffective task assignments, ill managed organizations are often left with no other alternatives. Becoming more efficient and killing job duplicity is one of the first steps towards working smart. In most cases, small companies and start-ups usually don’t have the burden of redundancy in their teams so it rarely applies.
Cutting marketing and advertising spend can severely cripple your growth potential. Cutting on marketing to reduce costs may start you on a downward spiral that quickly gets out of control. That being said, I will venture to say that if some advertising avenues aren’t producing a good ROI, the solution should always be to get your campaigns up to speed and choose wisely between the different options to get the biggest bang out of your advertising dollars. There is a cost of opportunity between choosing one media outlet over another. So do your math and invest in marketing you can track and that generates profits. The Marketo blog has an article that will help you measure your marketing ROI.
This brings us to the expenditure that can really make an impact on your bottom line, and where most entrepreneurs fail to act. Your workplace should help your company thrive instead of sucking you dry. Small companies between one and twenty-five employees can greatly reduce their set up and monthly costs by choosing flexible full service office space. Executive Office Suites and Coworking spaces, also known as shared offices, business centers and flexible workplaces, provide very low entry fees, flexible service agreements and fully furnished, full service, ready to go office environments at a price several times lower than having your own space. You choose from private or shared space configurations and business essentials like Internet, phones, meeting rooms, and office support staff are included. One free resource that’s proven helpful to thousands of entrepreneurs in the US and Canada is www.officelist.com. Explore reducing your expenses in this area. You may be surprised at the savings, and your team will greatly appreciate working from a modern space with a prestigious address. Not to mention the networking possibilities these types of spaces have to offer.
“As the CEO & co-founder of Officelist.com, Uddy Carmi has spent much of the last decade as an entrepreneur focused on the growth, success, and services that his company offers.”