Why You Are Getting Your Business Expenditure All Wrong And What You Can Do About It
Anyone worth their salt in business knows that profit is the sales price of your good minus the cost of producing them. So to get a bigger profit you can either up your price of your product or reduce the cost of its production. Here are some tips for doing the latter.
Firstly a simple way to reduce production cost is to offer low wages to your workers. While it can go a long way to reducing your expenditure, consider carefully whether it is the best option for your business. A Smaller business that needs to train workers may struggle to retain staff if they offer low wages. Larger companies may be able to absorb this difficulty more easily into their infrastructure. This makes it a more viable option for them.
Next, consider the things that you use quickly and a lot of. One way of saving on consumables is to shop around for a better price from different providers. You can also get a preferential price by negotiating with your current provider. Suggest buying from them for a longer term, at a lower price. They may be glad to secure your business and so be happy to take a hit on the cost.
Another way to save money on consumables is to check that you are using the right product for the job. Don’t waste money on items that supersede your needs. If your office works on electronic filing, then you will only need a scanner, not a scanner printer.
Also, be aware of regulations in your industry designed to keep prices down for commercial use. An example of this is Diesel. Make sure you are not buying the more expensive White Diesel, if you qualify to use the cheaper Red Diesel. Red and White’s diesel are the same, and one is dyed so inspectors can check that it is being used in the right way. If you are unsure of your eligibility, contact a Red Diesel supplier for some clarification.
Depending on your business, you may have high site fees to pay. A business that requires face to face interaction of some sort with need a physical base. However, it is possible to save money in this area by sharing office spaces or venues.
A business that does not need any face to face interaction can opt for a remote working system. This eliminates the need for overheads altogether, and employees are not limited to a single location. This cuts down on company car costs and commute times. Making it a win-win situation for everyone.
Lastly, why not evaluate the materials you are using in the production process? Are there any that are overpriced? Could you negotiate a better deal from your provider or is there an acceptable alternative? Also, take a look at your production process can help you save money. Make sure your process is efficient as this will reduce wastage, production time and labor.