What are the Hidden Profits in Small Businesses?

Finding hidden profits in your business is the dream of every business owner. What most are unaware of is that money can be saved in every business on a daily basis. Your business plan has cost cutting measures in everyone’s job description.

The variable costs of running a business mainly come from the manufacture sector of your business. With an increase in sales, more money is allocated for raw materials. This is a good increase in spending that reciprocates directly into increased revenue. The fixed expenses are where the big money savings and hidden profits can be found.

The biggest areas of a business where you can cut cost are in business supplies and energy usage.  This is where attention to the little details will save money over time. Buying in bulk on things like copying paper, printer paper, pens, and other commonly used items around the office can save 20% to 30% of their yearly costs. This might be only several hundred dollars a year, but if this is done in all areas of the fixed expenses, then 20% to 30% overall reduction can save thousands of dollars a year. Instead of revenue going out, this now becomes part of profit.

Energy consumption is usually the second largest fixed expenditure. In most companies, this is an area where the most waste can be found. If you have 8 employees that use computers, 12 hours of energy consumption a day can be saved. Most employees leave their computers on when going to lunch and on their breaks. Since the average worker takes ½ hour a day in breaks and 1 hour for lunch, this is 1 1/2 hours a day their computer is on with no work being processed on it. If they are shut down, the energy to run you business computer would be a 17% energy savings.

Energy savings can also be found in how the computers are set up to consume power. Computers are set on top performance setting so graphics can be loaded fast by the computer. If this setting is reduced to the minimum power setting, the word processing programs will not be affected, just the ability for your employees to surf on the internet fast or play games. That is when the processors require the top performance of the computer, which is not in most job descriptions.

Lighting is an area where every company can save money. The use of florescent bulbs instead of incandescent is significant. Large corporations noticed this years ago and have implemented that one day a week, the lighting in the office would be reduced. As a small business, this could be done on a daily basis. By reducing the light by 2/3rds a day, the cost savings would be seen immediately on your next energy bill. There is no need to have the entire office light up as bright as if the sun was shining inside.

Finding money saving ideas should be in every employee’s job description. With this part of your business plan, the hidden profits of your business will surface and your fixed expenses will be reduced.