Typically, when businesses reduce costs, they simultaneously boost profits. When costs are lower, businesses have an easier time maintaining funds to sustain their operations. Help your clients identify ways to lower their business costs. Look over their income statements to identify areas where they may be wasting funds, and help them come up with cost-saving ideas.
Negotiate Lower Prices
If your clients pay too much for their inventory and supplies, urge them to negotiate lower prices. If you have the gift of the gab, you could help them negotiate with their suppliers. Also, give them ideas for lowering prices. For instance, could they order more and save money by buying in bulk? Can they create a buying co-op with similar businesses to lower prices? Should they look for a new supplier? Help your clients work through these questions.
Boost Organization to Lower Costs
In some cases, businesses end up overpaying for supplies or bills due to disorganization. For example, if your client always pays internet or utility bills late, they incur a late fee every month; those fees add up over time. If a restaurant constantly runs out of a certain item and buys it at the grocery store, they lose money by purchasing items at retail rather than wholesale prices. Help your clients find ways to be more organized and manage their money so they can hold onto more of it.
Eliminate Unnecessary Expenses
When you go over your client’s books, help them identify unnecessary expenses. If they travel for business, can they cut back on hotel room costs or meals? Can they lower payroll costs? Are they spending money on ineffective marketing channels?
There may be wasted money that isn’t on the books. Low employee productivity can lose businesses a lot of money. If employees are tired, ill, or stressed, they generally aren’t as productive at work, and to help, your clients may want to offer wellness initiatives such as on-site yoga or work-from-home days. Alternatively, your clients may want to draft policies limiting smartphone use on the job or similar measures to boost productivity and lower wasted payroll costs.
Discuss the Benefits of Interns and Freelancers
Full-time employees used to be an absolute must for all businesses, but with the rise of the gig economy, more and more people are turning to freelancing. Talk with your clients about potentially replacing some of their full-time employees with freelancers. Also, help them decide if interns might help lower their costs. Interns generally command much lower wages or potentially even work for free, and tax credits can help offset the costs of hiring interns or students.
The right technology can also help your clients save money. In some cases, tech solutions create immediate savings. For example, if your clients manually enter information from their point-of-sale system into their accounting software, an app that automates the process instantly saves your client time and money.
In other cases, the savings are more gradual. If your client runs a fast food restaurant and invests in an ordering kiosk, your client won’t have to pay an employee to take customers’ orders. In this situation, it takes longer for the savings to match the cost of the technology. Help your clients crunch the numbers so they can figure out which technology offers the best potential return on investment.
Track Return on Investment on Everything
To help your clients evaluate where they may want to cut back, help them put in systems so they can track their return on investment. To illustrate, imagine your client is spending money on marketing. Urge them to ask their customers where they heard about the company so they can see where their marketing efforts are having the greatest impact. Then, they can devote funds to the areas with the largest return on investment and drop other marketing approaches that have less impact.
Study Their Industry
A lot of cost saving techniques are industry-specific. Research the specifics of your clients’ industries so you can give your clients practical advice. You don’t necessarily have to be an expert who understands the industry inside and out. Even just reading a few articles from business publications can help. When you’re armed with that type of knowledge, you can offer your clients advice that is realistic and effective.
Track All Expenses
You probably do a lot to help your clients minimize their tax liabilities, and by lowering their tax bills, you help them to cut costs. However, if your clients aren’t tracking all their expenses, you can’t deduct those costs on their tax returns. In that vein, remind your clients to track all of their expenses, and recommend tools or apps to help them track their expenses easily.
If your clients can trace some of their profitability back to you, they’ll be more likely to continue to seek your guidance, helping you retain these clients in the long term. It also increases the chances that they may refer you to others. To make yourself invaluable to your clients, look for ways to help them cut costs, and assist them in implementing those changes.