finance, Small Business, Uncategorized

Cutting costs

Whether it’s part of your annual or quarterly business goals, you need to take a look at your business and find ways to cut costs.

You may be thinking that you do this every day. You may be thinking that you have no time, you have to run your business. You may be trying to get more sales, get more people in the doors, find more clients, and simply grow.

Despite all of these efforts, you probably can find ways to cut costs. And I don’t mean to replace the Charmin toilet paper with a generic version. Specifically I mean, where can you streamline your purchases and business operations?

I know you are smart enough to call the phone and cable company every year and negotiate that rate down but are you calling and renegotiating your vendor contracts too? If you are buying 10% more goods from one supplier, than you might have some bargaining power.

Take a look around your business and operations and start brainstorming. I have worked for large corporations. Even the small changes in contracts and business processes resulted in millions in current and future savings. And I mean small changes. And in the most boring ways.

One global company finally streamlined all of their office supply purchasing into one main vendor. That’s pretty simple even though it did take about a year to evaluate bids, choose one supplier, and then implement purchasing processes company-wide.

All office supplies, including laptops and office chairs for 60,000 global employees, were streamlined to one vendor.

The results?

Employees were forced to choose from a handful of pre-selected staplers. No one needs a gold-plated stapler. That saves money. 

Purchasing did not have to process, approve, and pay multiple invoices. With over 120 locations, there could have been over 120 each month! Now there’s one. That saves time and money. 

Need 300 laptops? Guess what? You can get discounts on bulk purchasing. That saves money. 

With the combined total sales in one supplier, the company negotiated a yearly rebate. For example, if the company spent $500,000 a year, then the company received 1% rebate. But that would never had happened if each individual office bought from 120 different vendors. That saves money.  

I use this as one example but there are more. Can your business purchase more goods at one time to receive a bulk discount? This can be raw materials, shipping supplies, or whatever. Take about 15 minutes and think about processes and ordering that you can streamline and cut costs. Then schedule time to do this task.

Then thank me for saving you money. Then share this post with your fellow entrepreneurs and small business owners.

 

 

Note that I am trying the publishing on a Thursday instead of Monday to see if the number of readers increase. Who has time to read stuff on Monday morning when you have REAL work to do, right? 

 

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