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In business, strong sales don’t always guarantee success. While it’s brilliant to generate orders and drive sales, you should never underestimate the importance of controlling spending. If you’re seeping money from every orifice, no amount of sales is going to save you. You need to balance the books and make your business as cost-effective as possible. If you’re hitting sales targets, but your profits are minimal, it may be time to consider if your business is spending needlessly. Here are some waste management techniques you can try to reduce spending and eliminate unnecessary costs.
Your staffing structure
Many business owners devote a significant portion of their income to covering wages. If you run a business and you’re hoping to reduce spending, one of the first things you should do is examine your staffing structure. Do you need as many members of staff as you have or could you cope with fewer people on the team? Do you run a seasonal business, which means that you have people twiddling their thumbs for long periods of time? As the manager, it’s important to work out what is actually needed and identify areas where you can trim costs. If you’re only busy for a few months of the year, you don’t need a full team all year-round. Consider options such as offering temporary contracts or seasonal shifts. If you tend to take on projects that last a few months, rather than years, it’s also wise to look at working with freelancers.
Hiring versus buying
Many businesses encounter situations where they need a vehicle, equipment or technology on a short-term basis. If you need machinery for a 6-month project or you’re working on-site for a few weeks, and you need trucks at short notice, don’t automatically think of buying. Contacting equipment hire companies or vehicle leasing firms like Flex Fleet could offer a much better solution. Hiring is a much cheaper option, and it will save you money both in the short and long-term. If you don’t have a seasonal business or you undertake projects on a continual basis, and you’re going to use a crane, a truck or a specialist tool daily, it may work out better value for money to buy, but it’s always worth looking at leasing options.
How much do you spend on covering the cost of travel? Have you got employees going here, there and everywhere for meetings? If you’re forking out a fortune for airfares, hotels and expenses, you can limit the number of trips your employees take by investing in technology and software that enables your team to communicate with colleagues and clients via calls and video conferences. Imagine how much you could save over the course of the year if you reduce the number of overseas trips. Sometimes, face to face meetings are the only option, but this is not always essential and there are much cheaper and more environmentally-friendly ways of operating.
Is your business wasting money? If you’re spending too much, it’s time to tighten your belt and start generating more profit.