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Cutting down cost as a business owner

Whether you are a start-up or an existing business, it is important in this economic environment to do whatever is possible to cut down cost…

Whether you are a start-up or an existing business, it is important in this economic environment to do whatever is possible to cut down cost and save money. Start by putting a cost-savings plan in place for your company and then take action as soon as possible.
The good news is there are many ways you can cut down cost if you look carefully. These are 10 creative ways to save money.
Put business first: Mr Chris Nguvan, an economist says most business owners can save cost if they learn to differentiate between business funds and family funds.  “Most people cannot differentiate between business and family. When family members want something from their shop, they tell them to pick without paying. That can kill business and increase the cost you incur on your business. You must know when to draw the line between business and family. I know a man whose business folded up because; the wife goes to the shop and asks them to give her money, without paying back. So, to cut down cost, you most see the business as a different entity,” Nguvan explains. 
CEO should not pay self so much: “there are CEOs who pay themselves so much”, Sunday Enemali, a business analyst said.  “If you ought to pay yourself N100, 000 and you know that is the profit for that month, you can reduce your salary. You should invest part of your salary into the business. This will enable the business to thrive better and you will reduce cost,” Enemali explains. 
Use social media for advert instead of mass media: “if your business is still growing, you should find cheaper ways of marketing it on the social media rather than paying for airtime on radio or TV. This will save cost,” Victoria Tochukwu, an IT expert explains. Going on air in a radio station to advertise will be more expensive. In Nigeria, there are over 40 million internet users; hence, using the social media via the internet may just be the fastest way for you to advertise.
Cut down on business trips that don’t generate revenue.  Instead of travelling for a conference for instance, you can use Skype for conferences. And if you must travel, opt for less expensive flights.
Limit the number of staff you employ. For instance, if you have an accountant, he or she can also serve as cashier. There will be no need to hire cashier.
Instead of renting a big shop, opt to share the shop with other businesses. So you can bear the cost of paying the rent of the shop together.
Buy at a whole sale price:  If you can get an item cheaper at whole sale price, why buy at a retail price. Or you can buy second hand too. Find office equipment and furniture at a fraction of the retail cost as other businesses liquidate auction items.
Also, trade goods and services with other businesses to reduce cash expenditures. This is called trade by barter.
Go paperless
You can lower storage costs, printing costs and improve overall efficiency by running a paperless office. By scanning documents you can send and share information effortlessly saving your business time and money.
Lease equipment
To avoid the big upfront costs you would face when purchasing equipment consider a lease. You not only save your company’s money but you can save a substantial amount of money in repairs, upgrades and maintenance since many lease agreements cover these expenses.
Ask for the discount
For instance, the suppliers you work with may have quantity discounts of 50% or more depending on the terms. You may be able to meet these requirements and qualify for a lower price. To find out, ask about discounts and what you need to do to earn them.
 

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