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How to Reduce Your Business Costs

By: Ed Smith

 

How to Reduce Your Business Costs

Last year saw business confidence plummet in the UK, against the backdrop of Brexit and sustained economic decline. SMEs in the UK were hit particularly hard, with confidence amongst these ventures down by 20% in relation to 2017.

As business confidence dwindles, firms are likely to adopt an increasingly conservative approach that focuses primarily on consolidation rather than growth. As a result, companies will look to slash commercial costs and optimize their profit margins, in order to create a safety net in a strained economic climate.

In this post, we’ll look at three ways in which you can reduce business costs without necessarily impacting on performance.

Purge Your Supply Chain

Non-strategic costs often offer the best avenue for commercial savings, as they rarely have a direct impact on the quality of the product or service that you sell.

With this in mind, you should try to reduce costs by contacting vendors within your supply time and informing them that you’re price shopping. Then, begin to engage with vendors outside of your traditional pool, whilst prioritizing large discount suppliers that are known to offer advantageous deals.

This should afford you a competitive edge and help you to generate significant savings for your business.

Reduce Production Costs

If you’re a product-centric brand, production costs are likely to place the single biggest drain on your business.

The same principle can be applied to the materials that you use to package and ship your goods, as investing in recyclable and reusable items such as corrugated cardboard boxes can save you huge sums of cash.

Over time, you should also look to track and measure the operational efficiency of your business, whilst placing a keen focus on production methods. Set performance parameters as a part of this, and be sure to act on instances where you don’t fulfill these.

When cutting production costs, the key is to focus on areas and aspects that don’t have a direct impact on the quality of your product ranges. Otherwise, any savings may be a false economy as they come at the expense of the salability of your products.

Minimize Your Travel Costs

Whether you have a sales team that travels globally or are required to source raw materials from all over the world, it may be wise to consider slashing your business’s travel costs.

There are several ways in which you can do this, with one of the best being to book empty leg flights. These are flights with pre-defined departures and destinations, whilst they’re perfect for short-notice trips and one of the best value options on the market.

The key is to always compare the market in real-time, and identify the best option to suit your specific needs.

Published: July 12, 2019
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Ed Smith

Ed Smith developed a keen understanding of business through his studies and early business ventures. He now looks to advise start-ups and is extremely keen to make sure every entrepreneur gets the advice which could make their business venture a success. He has been a guest author on various high authority business sites.

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