15 Feb Steps To Cut Business Costs and Up Your Revenue
Even a minor revenue increase or expense reduction can impact your business’ profitability. Every business owner incorporates various measures to keep their expenses in check; here we discuss a few steps to cut business costs to improve your bottom line:
#1 Conduct some comparative research on supplies and services
You can save money on your business supplies by contacting different vendors and negotiating prices. This will indicate to them that you’re spend-savvy and that you will also shop around to get the best prices. Most suppliers are open to price negotiations, especially in the current competitive and economic landscape and would prefer to offer a better price than losing a customer. You can also quote the name of a supplier or vendor who is offering you a lower price. This information can be leveraged to get a better price from your current vendor.
#2 Get creative with cutting production costs
In addition to the most obvious ways to cut costs, if you want to make more of an impact you need to get a little creative with your approach. Cut production and material costs by selling various leftover materials such as cartons, containers, wood, paper and metal etc. instead of sending it out to the recycling centre. You can also consider different ways in which to utilise waste to create other products.
#3 Make optimum use of your production space
Consolidate/centralise the space required for production. If it’s an option, lease unused spaces to other individuals or businesses; this could mean leasing out larger spaces like warehouses or even smaller ones like office units. Assess the manner in which you are using the existing space. The common space wasters are excessive supplies, inefficient furniture placement, piles of paper and overflowing storage etc.
#4 Create multi-use zones
You can centralise/consolidate the various departments or functions of your business and create multi-use areas. For instance, a break room can double as a meeting room, or a storage room can also be used as a copier room etc. The opportunities may vary based on the nature of your business.
#5 Track and measure your business’ operational efficiency
Adjust and optimise the manner in which you use the available resources. It’s important to set specific performance parameters that are a reflection of your efficiency goals and make it a point to offer incentives when any of those goals are met.
#6 Reduce financial expenses
Reassess your financial accounts and insurance policies and for ways to save money. You can save on your insurance by doing some comparison shopping and getting the most competitive rate; you can then ask your insurance provider or current lender to match those rates. If possible, consolidate bank accounts and insurance policies. Intermittently evaluate your insurance policies to ensure you’re not duplicating coverage and aren’t over-insured.
Conduct future forecasting and a thorough cost-benefit analysis when considering any type of business expansion. Consider aspects such as the effect of debt payments on your cash flow as well as any opportunity costs. Excess debt always affects your interest rates, company rating, and the ability to borrow from lenders in the future.
In addition to these steps, you should also look for ways and means of cutting marketing costs and increase the use of social media even as you reduce the use of traditional marketing techniques.
For effective and sustainable cost reductions & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 1300 170 585. If you prefer, you can also request a call back or write to us at this email address.
Thanks for reading,
Benchmark Cost Solutions Team
1300 170 585