Whether you are a start-up or an existing business, it is important to cut costs. The good news is there are many ways you can do that if you look carefully.
“Discipline is required to cut down costs,” Mr Joe Obaje, manager of a business centre says. “Some of the luxuries we enjoy are at a price. Every time we use the inverter/generator and it’s not generating income, I tell my staff to put it off. Discipline is very important if any business most survive at this time. It’s the needs that we should meet not luxuries,”Obaje said.
Put business first
Mr Chris Nguvan, an economist says most business owners can save costs 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 it without paying. That can kill a business and increase the cost you incur on your business.
“You most know when to draw the line between business and family. I know a man whose business folded up because his wife goes to the shop and asks to be given money, without paying back.
“So, to cut down cost, you most see the business as a different entity,” Nguvan explains.
Don’t take business money home
For Folashade Abioye, as an entrepreneur, the strategy she has adopted is to keep the daily income of the business in the bank. “From my experience, I have learnt not to take business money home. Because when I do, my spouse will say I should give him a loan. And he may end up not paying back.
“So, now as soon as it’s 3:30 I tell my staff to take the sales to the bank. This is one strategy I have adopted now,” Abioye says .
CEO should not pay self so much
“There are CEOs who pay themselves 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.
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.
Let your staff play double roles: For instance, if you have an accountant, he or she can also serve as cashier. There will be no need to hire cashier.
Opt to share a shop with other businesses so you can pay the rent together. “For me, I decided to share a shop to cut down cost,” Angela Onma a hair dresser at Abraham Plaza, Utako says. The cost of this shop is N650,000, so I am sharing with the guy barbing and the lady doing manicure. This reduces the cost of renting the shop,” she said.