As a business owner, it can be a shocking experience to find that your business is burning through its budget. Taking immediate action is usually necessary but that doesn’t mean you should opt for quick-fix solutions.
The best way to reduce long term expenses is to carefully analyse the way in which your business operates, looking for long-term solutions that could save your company hundreds or even thousands of pounds. Here are some tips on how to get a firmer grip on your business expenses.
Not properly identifying cost can be one of the biggest leaks in your business’ finances. By drawing up a flow chart of your operation, whilst carefully costing every element of your business, you can identify where overspending is occurring. This could mean finding a new supplier or modifying your product to come in on budget but you will inevitably be making long-term savings that matter.
A good example of this is businesses wasting money on fuel for their business fleet. By changing practices such as using a fuel card, businesses can have a clearer picture of their outgoings, a more advanced means of responding, and a gateway to significant savings and increased efficiency.
Sit down and examine every process in your business – you will no doubt be able to identify needless or inefficient processes.
Devising ways of improving your processes is paramount. It could well be that your staff need more or better training, but if you factor in the long-term profits and happiness of a properly skilled workforce, it will most definitely be worth it.
Speak to your employees
Asking your workforce where your business could improve can result in some extremely useful, humbling and money saving feedback. Your staff knows the ins and out of the business that can often be forgotten by managers under pressure from people higher up the chain. Holding regular feedback sessions as well as having a suggestions book is a great way of keeping on-going feedback and discussion.
It can be easy to get lost in the finer details of business operations, but there are many ways in which your company can save money without drastic change. Consider things such as wasteful appliances being left on, unnecessary heating or the price of the paper in your office printers. By cutting back to using only what you need and looking for savings everywhere, you could be making considerable savings with little effect to your day to day operations.
The customer is always right
Customers are a great source of information. Not only are they a fresh pair of eyes, they are ultimately the people who will make or break your business’ fortunes.
Customer feedback is very useful for evolving your products and services, but it can also help you identify areas where you need to focus more resources, and also where you don’t need to spend so much. Customers are unlikely to say, “You should spend less on…” but by asking them what makes them loyal to you will give you an idea of what you need to prioritise.