Business operating costs are unavoidable in any successful company; however, there are plenty of ways you can slimline your expenses to improve your profit margins. With small and medium-sized businesses in mind, we’ve come up with eight easy ways you can lower your costs, leading to increased revenue.
Improve the efficiency of your employees
Identify the points in your supply chain that slow everything else down. To find these out, don’t just rely on your own observations, ask your employees what could be done better to make their job easier and more productive. This will not only solve the problems that actually need solving, but it will also make your employees feel valued and listened to, improving your employee retention rate.
Identify and resolve problems more effectively
Recognising and minimising risks will prevent issues from spinning out of control. Identifying these risks and having systems in place, like hazard training and fire drills, will mean that they can be resolved quickly if a problem occurs. Knowing who is responsible for solving issues will minimise the delay in resolve since a specific role is tasked with settling the issue.
Minimise waste
Are there departments or elements of your processes producing a significantly higher amount of waste than others? Or, maybe there’s a point in your supply chain that’s not providing the return on investment (ROI) you expected. Eliminating or altering wasteful parts of your business will do wonders for your bottom line as they can help you focus your efforts on more valuable areas of your organisation.
Reduce supply expenses
If you find you’re spending too much on your supplies – be this your manufacturers or your office stationary providers – shop around for alternatives. Look outside of those you’re familiar with and you may find a better deal elsewhere. Otherwise, let your suppliers know you’re comparing the market, and they may be able to offer you a better price in exchange for your loyalty.
Take advantage of modern marketing techniques
Inbound marketing techniques can often be more effective than traditional marketing (like broadcast, print, and cold calling, for example). You can use modern marketing methods like email marketing, social media advertising, and a blog on your website to increase your online profile and help prospective customers find you via the Internet. It’s free to set up social profiles and to start blogging on your website, so these modern forms of digital media are often cheaper than radio advert, for example.
It’s also worth making yourself known within your industry. Build your network not only online (via your personal LinkedIn and Twitter pages, for example) but also face to face – attend events and meet possible clients and collaborators. They’re much more likely to want to work with a friendly face they’ve met before.
Modern technology
Don’t rack up company expenses travelling to meet with clients unless it’s necessary; virtual meetings over programmes like Zoom or Skype can save you time and money. Virtual meeting rooms are especially beneficial for businesses that might not have the space to host clients on site. Now that COVID restrictions have had such a huge impact on the workplace, this is, more often than not, the preferred method of communication.
Reduce paper use and save on printing costs by keeping your key documents on Google Drive or Dropbox. Remember to keep your cyber security system up to best practice.
Don’t try and do it all – find your niche
No one likes a one trick pony, but don’t dilute your key skills and talents by trying to do it all. Specialising in one or two areas of your industry will help narrow your focus and your company’s expertise will blossom. Importantly, your product or service will be of a higher quality once refined, as you won’t waste time or money trying to get your fingers in all the pies.
You limit the types of contracts you accept, however you’ll be able to subcontract, meaning you share your contract with your network of trusted businesses. This will help lower the lost of the project as you can focus on what you’re good at instead of trying to learn new skills and waste money on employee training.
Focus on quality – implement a quality management system
A report for 2020 from Deloitte found that manufacturers can spend up to $100,000 (£71,510) and 116 workdays per site per year to comply with overly complex, outdates, and redundant quality management system. An efficient quality management system will reduce how much producing a quality service or product costs for your business as you’ll have a smaller margin for achieving this goal. You’ll meet the standards of your clients the first time around with no need for re-dos.
