Little things that save pennies, dollars and more
It’s all the fault of that nasty bottom line. You know, the number that shows how much money your company made in profit…or didn’t. You want that number to be as high as possible, but with the economy still dragging and consumers cutting back, you’re probably like so many managers, who are wondering how can I save my company money, and still keep everyone happy.
Here are some pretty painless ways to reduce your expenses, and add a little bit more to that profit statement at the end of the fiscal year.
What are your supply costs?
No, this is not a trick question. Too many business owners and managers don’t really know how much their supplies cost. The reasons range from being “too busy” to look at the details, to too many people handling sources and purchasing.
So before you can begin to answer the question how can I save my company money, you need to have a complete and accurate picture of what you’re currently spending. Skip this step and you might start cutting where things are already lean, and leaving profit-busting fat on the table.
Where are you buying?
Once you have a handle on what you’re spending, the next step is to look at where you’re shopping. Are you buying office supplies at a local chain store, or are you taking advantage of B2B savings available from business supply companies that cater to people like you (instead of you and a middle-schooler doing a school paper and a homemaker organizing recipes and …) Are you buying your restaurant’s ingredients from the grocery store or directly from farmers or distributors? The answers matter.
Not only are B2B companies likely to have lower prices, they can save you time by allowing you to shop for more of your needs online or via catalog. That means less running-around time, and more time actually running the business.
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Who’s doing the buying?
Unless you have a large company, buying decisions should be centralized along supply lines. That means office supplies are sourced and purchased by one person or team. Tools are sourced and purchased by one person or team. Or perhaps all purchases across supply and ingredient lines are handled by one team.
Centralization of purchasing allows for bulk discounts, utilizes expertise and reduces duplication. It also allows the purchasing specialist(s) to build relationships with suppliers. That can lead to special deals, discounts, and preferred terms. All of that saves the company money without cutting back on anything!
What would make things more efficient?
Sometimes the best way to save money is to spend more up front. If everyone in the company is using old computers that crash and lockup, critical worktime is being lost every time they need to reboot or call IT. And if those crashes affect customer service, you could be losing business, too.
Buying new business computers might eliminate all that down time, while making your company look more prosperous and professional to customers.
The same principle applies to everything from kitchen equipment to delivery vehicles. Using broken or inefficient tools is a false economy, and probably costs you much more in the long run. If it works well, you’ll save money.
Don’t forget the training
One of the most effective ways to reduce costs is to have a well-trained workforce. So how does your staff stack up? Are you providing them with complete and on-going training to stay up-to-date on the skills they need? Are you allowing them a chance to build additional skills to take their role to the next level?
A relatively small investment in training can yield big results in quality and efficiency. It can also reduce accidents and turnover — both big money expenses. Your employees will benefit, your customers will benefit and your bottom line will head in the right direction, too.
Saving money is seldom about cutting back
Forget the popular mythology that saving money means cutting people or supplies or services. It’s not about belt-tightening. It’s about using the right belt!
And when it comes to really adding to your profit margin, working smarter is always the better choice.