Every business wants to be more profitable. To return better results for its shareholders and to operate as a lean and mean money-making machine. But profitability is not always an easy goal to obtain, especially in these tough economic times. And while business growth can only really come from driving sales, profitability is something that can also be achieved by cutting costs. This is an area of the business that needs to be reviewed regularly. It is not about putting draconian measures into place about taking responsibility away from managers, it is simply about asking what can be cut or better managed. With that in mind, here are five areas that have the ability to make a big impact on the balance sheet.

Travel budgets

This is an area that often tends to spiral out of control. One flight soon becomes many and the allure of travel and face-to-face meetings gets over-stated. Modern technology means that it isn’t necessary to spend so much time travelling. Flights and time on the road also translate into dead or unproductive time, with the truth being that office-based meetings are the way to go. An easy way to make this happen is to find a company that offers video conference services Sydney, for example, has a couple of world-class providers. This is a modern and efficient process and while there may be some costs involved it is a whole lot better value than constantly sending you people traipsing all over the world in airplanes.

Insurance

You can almost always get a better price on your insurance. This is a very competitive space with lots of companies vying for your business. So, go out and get some quotes and then try and get one company to beat the other. Do what you can to drive the premium price down. If you don’t claim often (or better yet, at all) then you will be sought after as a client and you may well find the companies falling over themselves to do business with you. This is probably not going to be a huge saving, but it all adds up in the end.

Rental

Many companies don’t like the idea of purchasing due to the capital outlay involved and the risk of long-term liability. But purchasing premises can be a real saviour, especially if you are able to pay it off and are suddenly operating rent or bond free. If cash-flow is tight this is not something to explore (unless the mortgage repayments are a lot less than the rental payments), but if you get paid for a big project or experience a sudden windfall, then you should definitely look at purchasing.

Work from home days

Having people in the office is a costly affair. They use your water and electricity and toilet paper. They consume your tea and coffee and milk. It might sound like trivial matters, but it all adds up quickly. So, while having an office and getting people to come in and work from the business premises is very important, there is a lot to be said for work-from-home days as well. The savings that can be made from a single day a week of remote working can be quite significant – especially if you have a large staff compliment.