How to reduce your business costs by 10%
With the cost of everything rising you should aim to keep your direct costs to an absolute minimum in your business.
Most businesses should aim to reduce direct costs by at least a minimum of 5% every year however 10% is consider more viable and a healthier alternative rate.
Review your material costs, labour costs, production methods and anything else that is a major contributing factor to your business and seek more cost-effective, innovative solutions as alternatives where possible.
Here are the top ten you can implement into your business almost immediately.
- Barter – You should be bartering for goods and services with other businesses where possible. Try to trade for something before you buy it.
- Network – Network your business with other businesses. You can build alliances and offer referrals, trade leads, mailing lists where applicable and cut down on your marketing costs.
- Wholesale/Bulk – Save money by buying in bulk quantities.
- Free – There are plenty of freebie sites on the internet offering free software, graphics, backgrounds, online business services etc and could contribute to your business needs.
- Borrow/Rent – Rent or borrow equipment that you don’t need for long periods of time.
- Online/Offline Auctions – You can often find lower prices for usually expensive items and is ideal for getting your office equipment and or supplies for your business.
- Plan – Make a list of what you will need in the future and only purchase essentials.
- Unused or Obsolete – If you have unused or obsolete items, sell them.
- Negotiate – You should always try negotiating a lower price.
- Search – You should always be on the look out for new suppliers who can offer you more or provide you with lower prices and better quality.