Sorry but before you read on I have to say that there is no easy answer to this subject. The fact is that revenues and costs differ greatly from industry to industry. However there are a few small pointers that might make you just a little more profitable and lower your overheads or even increase your revenues.
Now most business directors would love to see their outgoings reduced and revenues increased wouldn’t they? Well so let’s look at how the seemingly impossible could be made possible.
There are many negative ways to cut costs in every business setting but I would like to focus in on a few positive ways to save a buck or two without damaging the products and staffing numbers.
- Share your resources with other businesses to capitalise on costs. For example rent empty parts of your building out to reduce your immediate overhead costs. Why not share admin resources across business or HR resources. Even look at distribution costs, accounting costs, insurances, security… all these costs can be shared if you share buildings. It might sound mad but you could even share a larger sales team by combining the teams if the products are relevant enough, don’t rule anything out here.
- Create supplier partnerships to gain more buying power. A top tip for cutting your buying costs is to partner with other traders to give you greater buying power and negotiate the best prices on everything. Try to partner with a bigger business or a business of equal size to at least double your buying power and increase your spend.
- Ask your employees what money is being spent unnecessarily as they see things that you don’t and know what is wasted in the day to day operations. Doing this also helps your employees to feel empowered to keep costs down and feel they have invested in the business.
- Culling bad project or products. Sorry this one had to come in here but every business has that one poor project or product that is losing more money than it’s making. Normally it’s the project closest to the boss’s heart but it’s got to go! An example of this is an owner of a café I know that is struggling to keep the business afloat but insists on producing 15 plus types of cakes for the café so that they are fresh for the cake counter. The issue is that they go bad before they get bought, therefore aren’t eaten and often get thrown out but she insists that there must be so many options of cake… true story… what a waste eh?
So we’ve made a saving but what about increasing our turnover.
- Marketing. Advertising consistently everywhere, you will be surprised how quickly the till rings and the phone calls. Make sure you have a smashing offer on and you’ll be in the money within moments, don’t forget to hit your target audience when advertising. To save costs you can also look at teaming up with other business and use your buying power to influence the source you are buying your advertising from. Avoid using ad/marketing agencies as they take a percentage from the source and it’s in their interest to keep your rates up as their percentage will equate to more. Also the best deals are always purchased through the publisher/producer of the product, fact.
- Broaden your possible markets for selling your products or services, don’t stick to the same old habits but shake things up. If you don’t have an online presence then make sure that’s your first priority, however a rubbish afterthought website isn’t good enough. It must represent your brand effectively and be on par with your best showroom. If you don’t go to trade fairs, networking events or have a social media networking presence then get to it now. All these factors will increase productivity, awareness and ultimately drive revenues forwards.
- Franchise yourself to a happier future. This isn’t a tip for everyone, every business or every industry but for some businesses it works really well. Go and consult with existing franchised businesses to see if it would possibly benefit your own. This can have massive financial rewards for you but could also be a pain in the neck, so don’t go into it lightly.
- Employ sales agents to compliment your existing sales force or even in extreme cases replace your sales force. Much like the franchise suggestion, do your research before approaching this; however it can be a very effective alternative to hiring additional sales staff.
So please feel free to take on board a few of these small tips and make some more money.
Thanks for listening, Daniel Frye