7 Ways to Reduce Business Expenses:
+ 15 questions every retailer should ask themselves
For some of you, this post is a review. I wrote a similar newsletter in April of 2023, but with renewed interest in the topic, I revised it for 2025. Enjoy.
PAYROLL
—For many retailers, wages are the single largest business expense.
—Ask yourself if you are using your employees efficiently. Do you have the right people in the right positions? Could you consolidate job duties or job descriptions to eliminate the need for additional new hires?
—Do you have employees that are not pulling their weight?
—Could you save money by outsourcing some duties? (ie: marketing or social media?)
—Are you tracking sales and comparing to past days/hours/months to better forecast your staffing needs? Based on sales, could you scale back retail hours to reduce payroll?
—One sure way to decrease payroll costs is for owners or salaried employees to work more hours, eliminating some hourly staff payroll costs. (Don’t shoot the messenger on this one. 😉) I know it is not always possible, but it should be evaluated regularly as an option.
INVENTORY
—Increasing margins is the easiest way to increase the profitability of your store.
—If you are concerned that customers will not pay more for the products you carry, then augment your offerings with high-margin items to offset the lines that you feel you cannot raise pricing on.
—Consider custom or private label items, for higher margins and exclusivity.
—Do you have product lines that are no longer performing for you? Eliminate them or cut back.
—Do you have departments or categories that are no longer profitable for you?
—Can you negotiate better terms or lower costs for the products you purchase?