Money Saving Tips Tristan on 02 Apr 2009 12:49 pm
Business Money Saving Ideas
In my experience, businesses are either run by frugal people who have keep a close eye on expenditure, trying wherever possible to keep costs as low as possible, or they are run by people who don’t worry too much about what they are spending, because they concentrate on generating a large turnover and hope that this will be larger than their inflated running costs.
I can kind of see the logic in this, though something I picked up from reading “The Millionaire Next Door” is that to really be successful in business, you should place equal emphasis on both aspects of your business. In essence you should try to maximise turnover and minimise costs, to therefore maximise profit.
As such, I decided to come up with some money saving ideas for businesses.
Offices/Premises
In reality, the office or premises that a business operates from is a neccessity, but it does not have to be regarded as a luxury, as many big corporates believe. The evidence of this can be seen in any city centre, where you will find big lavish office buildings housing various firms. They must spend a fortune on these offices, not just because they are city centre, but also because they are flashy, and that costs money.
Even the government are guilty of this, take the Financial Services Authority for example, they are funded by the fees levied against regulated financial services firms, something in the region of £200m a year, and they blow this on a very fancy head office in London’s docklands. They could reduce the fees levied each year and move the HQ to Barnsley and save a fortune.
Company Cars
The amount of money companies spend on car fleets is astronomical, mainly because they buy or lease brand new cars, and so pay the lion’s share of the depreciation. They would save a fortune if they bought the cars three years old and sold them once they were five years old, in effect get some other sucker to pay for the depreciation. But I’m sure there are good reasons why they have to have brand new Mondeo’s and Vectra’s, I just can’t quite work it out…
Expensive Marketing
How many companies that you see advertised on TV or in magazines, newspapers etc do you think ever really see a return on the amount of money they spend? I bet most of these firms pay large marketing agencies huge sums of money to come up with ideas for their brand or various products/services, and I’m sure the whole process for the client is very lovely, but in terms of value for money I bet it’s pretty poor.
I have in the past done some affiliate marketing, and when I was a mortgage broker, I worked on commission only, so I know about marketing from the sharp end. I bet if the marketing agencies that are retained were given the option to earn a commission on only the extra sales that their campaigns generated, they would run a mile.
My theory is that it’s very easy to spend thousands of pounds of someone else’s money without really worrying about the outcome, but if they actually had to be accountable for the money spent and the results, it would be a different story.
I’ve even heard anecdotes of companies that have cancelled profitable affiliate marketing campaigns because a marketing budget had been slashed…how bonkers is that? With affiliate marketing, you only spend money on the marketing if you make a sale, it’s win win! To arbitrarily cancel an affiliate marketing campaign because the overall marketing budget has been slashed is completely stupid. If anything, they should slash wishy washy TV/magazine/radio/newspaper advertising that doesn’t generate results and move any affiliate or commission only sales out of the marketing budget.
