Finding Money IN Your Business

Every company is in business to make money. There are only two sides to the money equation. Either you increase revenue or you can reduce your costs. Of course, the best of all worlds is to adjust both sides of the equation at the same time. There are several areas where a company can focus to increase their revenue, but where can they look to find money in their business? Here are some potential opportunities to help your bottom line:

1. Negotiate with vendors and suppliers. Due to today’s economy, everyone needs business and everyone is negotiable. Talk to your vendors about getting lower rates, investigate their competition, see if someone else has a better deal and at a minimum, use the competition as a negotiating tool. Also, talk to your vendors about getting better payment terms. If your agreement is to pay net 30 days, try and get net 60. Let your money work for you longer.

2. Evaluate your employees. Not many are comfortable approaching this topic since we’re talking about people’s livelihoods. The truth is that a company’s payroll can be their biggest expense. In tough times, it may be necessary to reduce your headcount. However, even in good times you should evaluate what your staff is doing and how they’re doing it. Get rid of poor performers and replace them with more motivated employees. Are there functions that can be done by a part-time employee instead of having someone on staff full-time? This may be a tough subject to address but it can’t be overlooked.

3. Barter. Look at your vendors, suppliers and even your customers—are there products or services you can use in your business? In essence, you’ll provide your product to someone at wholesale in return for something of value to your business. Of course, you need to make sure that value is equal or more than your cost.

4. Look at your business processes. Time and increased productivity is money. Make sure your business processes are documented and repeatable. Also, make sure you have some metrics in place to ensure the processes are being followed and they’re effective. If you’re not sure how to address your business processes, get some external help—many times this is where you can find the most money.

5. Leverage technology. Implementing the appropriate systems to help your business can translate to money dropping to your bottom line. Mundane processes can usually be done by using technology instead of higher priced manual labor. Look into using a Customer Relationship Management system (CRM) to better manage your sales process and improve your customer service. Can technology help your manufacturing process? The cost of technology continues to drop and this is an area where companies find money as a return on their investment.

These are only a few suggestions on how you can help your bottom line. Improving lease terms or looking at employee benefits are a few more. Some of these topics are difficult, particularly when they directly touch employees. It’s essential for every company to manage their costs and it depends on cash flow as to what degree a company needs to “cut to the bone”. Proper planning and execution is crucial to reducing expenses and improving profitability. Whether your company is healthy and profitable or you have hurdles that threaten your survival, seek the help and expertise needed to guide you through the process of “finding money”.