Tips on reducing costs and maximising returns in your new business enterprise.
The golden rule of business is to control costs, increase revenues, and maximize profit. It sounds simple, but it’s not so easy to implement.
Whatever kind of business you operate, it stands little chance of success without careful control of costs, particularly in the current post-Brexit economic times.
Those starting up need to take particular care, as research published in the Daily Telegraph states that more than 50% of businesses fail within the first five years.
Here we examine three core areas in which you can control costs and give your new business the best chance to thrive.
1) Manage the Essentials
There are some things that no business can do without, yet it is these that are often given the least consideration when budgeting. For example, whether you operate a large warehouse or a small cafe, it will need cleaning regularly. Huge savings can be made by purchasing industrial cleaning products in bulk rather than piecemeal.
Purchasing from a one-stop supplier can also lead to savings if your business has a need for related products. These might include things like aprons, gloves, cleaning chemicals, breathing masks and the like, for use in everything from the catering industry to factories.
This type of supplier is not just helpful for managing costs in an industrial business, however. Any type of organisation that employs human beings will have a need for personal hygiene and paper products. By making periodic bulk orders, you will know exactly what you are spending while at the same time saving money.
2) Office Supplies
Every business requires a greater or lesser degree of administrative work, and this means expenditure on stationery and IT equipment. Just as is the case with cleaning products, there can be a tendency where needs are modest to fail to budget for these expenses and buy them at retail price as and when needed. Not only does this lead to unforeseen costs, but it also fails to take advantage of the best trade deals that are available.
Of course you want your office to be well-furnished with the best technology, but even this can be achieved with massive saving by thinking outside the box.
There is an increasing choice of used computers for sale at a fraction of the cost of buying new. Buying used IT equipment does not necessarily mean you have to compromise on technology or reliability, as by purchasing from a reputable source you can still get the latest software and a full warranty.
Similarly, there are many companies that specialise in the sale of used office furniture. Again, this does not mean your office will look like something from the 1970s – it really is possible to save thousands by buying “as new.”
3) Stick to the Plan
When starting a business, it is absolutely crucial to decide your budget and stick to it. It is all too easy to become over enthusiastic in doing a little more advertising or joining one more trade association.
All of these aspects need to be decided at the business planning stage on the basis of what is really needed. Then it is up to you to stick to the plan, to give your business the best possible chance that it will still be thriving after those critical five years.