4 Ideas for saving on employee costs.
You need employees to help run your business, but sometimes employee costs get out of hand. The minimum wage increases or the market for employees just becomes more competitive. This can be a huge challenge for small businesses that work with a small team. Sure, you can cut the number of employees but that can send the wrong signal to the team or customers. Here are a few tips that might help.
Start with Productivity
A better approach is to focus your efforts on increasing productivity. If you have a productive team it will be easier to absorb the costs because your team will produce more revenue for the same cost of labor. How do you do this? It is not always easy. Start by assessing the work they perform and look at ways of removing unnecessary tasks. Almost every small business will find that their team performs activities that don’t add to the bottom line, find them and remove those chores. Often, they are easy jobs that don’t require a lot of skill and some employees will choose that work over more challenging activities.
Focus on sales
Find ways of focusing your efforts on the work that generates revenue and creates efficiency. If your business relies on referrals, use that free time to have team members write thank you notes to customers, or call them and ask them if they are pleased with the service you provided and how you can improve. At the very least they will be reminded of the value of the services you provide and be more likely to refer a friend or ask you to do more work. Customers what to be appreciated. When you reach out to clients you give them an opportunity to do more business with you, all too often people get busy with life and put off things that may require your services.
Can you outsource
Outsource the activities that are not your strong suit. That might include virtual receptionist service that can take calls when your team is busy or your office is closed. At Contact One our services are usually much less than the cost of hiring employees directly. Outsourcing can free up time for your team to focus on performing the work that your customers hire you to do. Plus there is the added benefit of having someone answer your calls after hours and setting appointments for your team.
Check your pricing
Lastly, make sure you are charging enough for your services. You probably are ready to know of competitors that charge more than you do for a similar service. Try “shopping” your competition if you don’t.
Recently we needed someone to work on the generator at our office. It took me almost a month to find a business that would return my call. When they did, they gave me a quote over the phone and never followed up. Fortunately, I was able to get a referral from a friend. When I called someone one answered my call right away and the owner came to meet with me the next day. His proposal was more than twice the cost of the previous company I spoke with. I chose them because they presented an action plan and offered a guarantee. The rate he charged enabled him to hire the staff needed to support his customers and provide great service. The takeaway is that small grow when then invest in the resources that keep their clients happy and those resources pay dividends.