5 key areas to save your business money
With margins being constantly squeezed it’s increasingly important to make sure you’re getting the best deals for your business.
By regularly checking and benchmarking internal and external costs you can save your business money and improve your bottom line without too much effort.
Here are five key areas to focus on where potential cost savings can be made:
Utilities often account for a large portion of annual operating costs which is why it’s important to regularly review your main utility providers, such as phone, broadband, gas and electric, to make sure you’re getting the best deals. With a lot of competition in these industries you may find switching providers can reduce your annual spend, freeing up money that could be spent on growing your business.
When it comes to suppliers, it can be really easy to find one and then just stick with it because you’re comfortable with the service. But this could be costing your business money.
When faced with problems of their own, suppliers are often quick to increase prices, but they’re not so quick to reduce them when their supply chain’s flowing again. So you could find yourself stuck with a higher cost for no extra gain.
This highlights the importance of benchmarking the cost and service against other suppliers. When doing this it is essential that any comparisons are made on a like-for-like basis and the volumes analysed are a true reflection of what you actually use, or you take into consideration the costs involved in holding stock. Also, be sure to ask suppliers of any additional fees to avoid being caught in a trap that could end up costing you extra. Likewise, many suppliers will be able to offer discounts for early payment of invoices.
Suppliers can sometimes get complacent so if you are looking to move, its worth asking current suppliers if they can do a deal as if you are a valued customer they may want to review their pricing to retain your custom.
As well as looking at external providers it’s also important to benchmark your business internally. How well are the key functions of your company performing? Could cost savings be achieved by outsourcing any of these functions whilst retaining or even improving quality?
Review your processes and policies regularly. For example, look at your credit management policy and review whether improvements could be made to get your money in the door more quickly. Could any processes be streamlined to reduce man hours without diluting results?
Are you generating enough inbound business? And is this business being converted successfully? If your research into these questions uncovers room for improvement it might be worth looking at reviewing current training methods.
With the success of your business reliant on a healthy cash flow, making sure you have the most suitable funding product in place for your business’s evolving needs is crucial. But when it comes to funding the cheapest option isn’t usually the best option, giving you more variables to consider when benchmarking.
With dozens of options available, it can be hard to identify the right one for your business, which is where talking to a finance broker could help. Recognising that every business is different, a good broker will work with you closely to fully understand your business’s funding needs and challenges in order to identify the right facility in terms of funding level, service and cost, helping you to overcome cash flow challenges and meet objectives.
Whilst having a recruitment agency that understands your business inside out is important to finding the right candidate, is relying on one source really getting you the best deal? Recruitment agencies adopt different resourcing methods, have varying advertising budgets and different internal databases, therefore, contrary to popular belief agencies aren’t all fishing from the same pond. So you may find that venturing out and using a different recruiting agency could have better results.
Likewise, it may be worthwhile adding vacancies to your social media feeds and company and partner websites to save recruitment costs.
Looking at where you can save on costs across all aspects of your business is always worth exploring but remember to make sure that the quality and level of service is not lost. After all sometimes it’s not the cost of a service but its value that is more important.