How To Reduce Business Costs In A SMB : Under30CEO How To Reduce Business Costs In A SMB : Under30CEO
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How To Reduce Business Costs In A SMB

| March 9, 2013 | 0 Comments

Outsourcing Needs for Your Small BusinessWhen running a small-to-medium business (SMB), keeping your overheads low is the key to success. It maximises your profits and keeps you competitive in the marketplace. If you have more money in the bank, it’s easier to get a loan, you can ride out the slower periods, and crucially, you can invest in and grow the company.

The most effective way to do this is to outsource activities that fall outside your core business competencies. Most SMBs wisely choose to avoid the DIY approach in specialised areas such as website design and maintenance, accounting, marketing and law.

Outsourcing these will help you to get through them more quickly, efficiently, usually better, and often more cheaply than if you had engaged in-house staff. It gives you and your staff more time to focus on the things that matter most to your business.

But what about those more physical and more repetitive activities – like delivering the mail, visiting the bank, or even running to the local shops for stationary and coffee? Outsourcing these can actually save the average SMB a lot of time, money and hassle as well.

How outsourcing your errands can bring big savings

How much money can you save by using a courier, exactly? Australian courier company Mailplus have answered that question with their “Business  Savings Calculator”. This ingenious program measures the real cost of hiring a courier company versus that of using your own staff for mail delivery, banking and other errands, and the numbers speak for themselves.

According to the calculator, hiring a courier will save your business $2,700 a year, when compared to assigning the same responsibilities to a full-time staff member earning an annual salary of $45,000.

When you reduce your full-timer’s salary to just $30,000, the savings are still significant: $900 a year. And that’s without factoring in the additional insurance costs of sending your own staff out on the road.

Another reason to outsource everyday office work:  it de-clutters the workspace. Imagine working in an office where mail, parcels and packages aren’t piling up while your support staff is tied up on other responsibilities. Not only that, it helps to reduce floor space demands – providing significant cost savings in a time when rents continue to rise and profit margins are being squeezed.

Is it strategic?

This is a good question to ask when you are judging the costs versus benefits of outsourcing different areas of your business. For example, if your main selling point is customer service, it’s probably a good idea to have a team of skilled and attentive people on your staff who will be able to deliver on that promise. If your competitive advantage is bargain prices, you can probably make do with an automated customer management system, or an offshore call centre.

In other words, you need to ask yourself whether it’s critical to your core mission – if not, it’s probably worth considering turning it over to outside experts.

Conclusion

The main takeaway is that if it doesn’t tie in directly with your core business, you’re better off outsourcing it just as soon as you can afford to do so. It’s the best and quickest way to get ahead, allowing you to maximise the time you can devote to refining the core competencies that will make your business stand out above your competition.

Chris Burgess is the CEO of Mailplus and has extensive experience in the courier service and business-to-business service market, having successfully franchised over 150 territories throughout Australia. G+ Profile

Image Credit: Shutterstock.com

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Category: Startup Advice