As business expenses go up, companies focus on increasing revenue in order to stay profitable. However, there is another way to tackle this problem. Why not try to keep the expenses down? This approach is often overlooked in favor of growing the business and increasing sales but having regular expense reviews can have a powerful effect on your profit. When it comes to saving money, the sales department is often overlooked in fear that such changes might negatively affect results. That is simply not true. Unnecessary spending is just bad business regardless of what department is in question. Here are a few great tips on how your sale department can save money:
Keep track of the expenses
Before you can start making any changes, you need to be aware of all the ways in which you spend money. Oftentimes, cost keep piling up without anyone really keeping track of them, and at the end of the month, you are just wondering where all the money went. Start by creating a of all the spending of your sales department. Make sure to include everything, not only the biggest costs. Oftentimes, those small expenses here and there add up to a huge amount. Once you have everything noted down, start reviewing each and every one of them and try to figure out which ones you really need and which are just unnecessary expenses that need to go.
Look for alternatives
If you have successfully identified all your spending, it should be easy to spot some of them that can be replaced with lower-cost alternatives. As an example, maybe you are providing your sales team with a company car that helps them get to important meetings. However, you need to keep track of how often that car is used. If the answer is not very often, then you are better off just using a taxi or Uber service and avoid all the extra work and expenses that come with owning a car. There are a lot of similar solutions that can help keep costs down. Try to look for alternative services that can provide the same or even better service for much less money.
Not everything needs to be new
New technology is being developed at a staggering rate and it's becoming very hard to keep up with it. Keeping track of all the newest smartphones and making sure your sales department has the latest one is neither possible nor necessary. The truth is that phones have become so good you don't really need the latest device in order to get all the tools required for the job. It's a lot more profitable to buy than invest in new flagship devices every few months. When it comes to the needs of your sales department, these phones will produce the same results as any new phone would but at a much lower cost for your company.
Review your bonus program
When it comes to paying sales employees, the debate has always been what the ratio should be between regular salary and commission. On one hand, you want to have a salary that will keep your employees satisfied, but on the other, you need to motivate and reward the most competent workers with bonuses based on their results. Finding the right balance is not easy, but it's worth investing your time into figuring it out. Having a commission plan that rewards the best employees will both lower your costs as well as increase your profits.
Cutting costs is not only about spending less money just so you can increase your profit. Getting rid of unnecessary expenses will leave you with extra money that you can further invest in the . Your sales team will be much happier if you cut all the unnecessary spending and instead, relocate those funds towards something that will help them do a better job.