6 money-saving tips to increase profitability for Australian businesses
Would it be possible for you to increase the profitability of your business by cutting some unnecessary expenses – or by spending proactively in certain capacities to avoid even greater long-term future expenses? Consider the following money-saving tips to see if there are areas where your business might be able to save money:
1. Cut costs on fuel with fleet fuel cards
For some businesses fuel is a primary expense. If your business maintains one or more vehicles, you’ll definitely want to perform a fuel card comparison. A comparison is a straightforward way to find out how your business can take advantage of the best fuel discounts and other perks by using one or more of the fuel cards that are currently on offer to business owners.
2. Implement an employee retention strategy
When an employee resigns and needs to be replaced, the hiring process typically costs a company a tremendous amount of money. It is not a simple matter to calculate what these costs amount to, but Business Insider reports that between productivity losses and recruitment costs, an average estimate for the year 2015 was over $34,000.
A multi-faceted employee retention strategy is essential for reducing the likelihood that any of your employees will quit. The first step in employee retention is giving your employees clear and consistent guidelines about the scope of their job and what’s expected of them. These expectations should be clearly communicated to them, both verbally and in writing. An employee handbook and/or a written job description can be helpful for communicating your expectations.
Other employee retention strategies include paying competitive wages, offering attractive benefits packages, giving paid training and proactively acknowledging employees’ contributions in the workplace.
3. Avoid outsourcing mistakes
Outsourcing can sometimes be a money-saving option for businesses, but it’s also an area where pitfalls are common. Outsourcing mistakes can cost a company business, which in turn can cut into profitability drastically.
The Forbes Coaches Council reports on a recommendation by Caterina Kostoula that startup founders should start by doing everything in-house in order to thoroughly understand the process before they attempt to outsource the tasks they need to complete. This can also enable the founder to more clearly communicate the company’s expectations when outsourcing.
4. Automate where possible to maximise efficiency
Many day-to-day business tasks can be automated, which can save substantial sums of money in the long term. Here are a few examples:
- Automate regular posting of company-branded content to social media.
- Write a month’s worth of business blog posts at once, and then schedule them for automated posting throughout the month.
- Send automated meeting and appointment reminders to colleagues or clients.
- Automate the scheduling of backups of your databases or important files.
- Automate the issuing of checks to pay your recurring bills.
- Automate your email marketing and follow-ups using segmenting and autoresponders.
Most of these examples are relatively simple to implement. Automated email marketing can be a bit more complex, but once you’ve set it up, it will greatly simplify your marketing and follow-up efforts. For example, if a prospective customer uses your company website’s email form to initiate contact, you can automate an instant response:
“Hi, [Customer Name]!
Thank you for emailing us. We received your email, and we sincerely appreciate your interest. Our customer service team will contact you soon to discuss how we can be of service to you.”
Automation, when implemented with care and consideration, can help to make many aspects of your business run more efficiently and cost effectively.
5. Utilise the Cloud and open source solutions
If you don’t want to invest the money it would take to maintain a server and software, you have the option to utilise the Cloud and open source software solutions. Cloud services can save you considerable sums you would otherwise have to invest in IT staff and hardware maintenance. Open source code can save you the cost of software packages and ongoing updates.
6. Make any necessary investments in information security
If your company collects sensitive data in any capacity, you’ll need to ensure the security of that information. For example, if you operate a business that takes payment by credit card, you’ll need a protocol for the safe handling of customers’ credit card data.
Cyber crime is an ever-increasing problem for companies in Australia and around the world. Australian businesses are a frequent target of cyber criminals. Dylan Bushell-Embling at Technology Decisions reports that the average Australian business suffered 53 security breaches in 2017. The global average that year was 130 security breaches. Each of these attacks can cost a business $100,000 or more.
You should not attempt to save money by ignoring cyber security protocols; with stakes this high, you can easily see that an upfront investment in security measures is far likelier to save money in the long-term. A data breach involving customers’ credit card data would be costly, embarrassing and possibly even devastating to your business – so take the threat of cyber crime seriously. Investment in effective security measures is money well spent.
We hope these six tips have helped you discover areas in which your company could cut costs. Implementing some or all of these ideas is likely to help increase your business profitability.