Getting Smart With Costs
Being aware of your costs and buying smart is a key component of running an SME - costs can be crippling and CASH IS KING !
Let me give you an example of an internet based distribution business that with a nudge in the right direction managed to significantly reduce their annual costs.
This business sent out it's products every day in cardboard boxes bought from their local stationary store, purely for ease of stock control - they bought them at a retail price of £3.91.
The irony of being an internet based business and not taking the small amount of time to Google search a wholesaler, set up an account and reduce their box cost by £2.36 to £1.55 is unfathomable. We'll leave out the added saving made on fuel getting to & from the store to collect the boxes!
On top of this saving it was worth cross checking the Google search with businesses that were available on the cash back sites i.e. TopCashBack or QuidCo which both provided a further 9.45% cash back on their purchase of boxes.
The business sent out on average 5 items per day, therefore with this small amount of effort the business started saving £12.55 per day which equals £3,263 per year saving.
A saving is always nice when you're running a business, but could there be more savings achieved with a little further investigation - of course !
The business used to use the most well know obvious choice for delivery of their items. Another internet search provided a courier broker that allows smaller businesses access to the discounted prices achieved with higher distribution numbers.
It allowed the firm to save £8.21 per parcel and delivered within 48 hours. Consider that on 5 items per day and all of a sudden there is a further saving of £41.05 per day adding a further £10,670 saving per year.
Just by getting just a little bit smart about costs, taking the time to search for better deals rather than convenience, allowed this particular business to add close to £14,000 per year to their profits.
This was just one area of their operations - a true eye opener to the statement "Look after the pennies and the pounds will look after themselves".
I invite you to take a look at 4-5 items you always buy regularly for your business and see how much you can save, I guarantee you'll be surprised.
When you do, come back and let me know in the comments I'd be interested to see some other successes.
( Source : A Pocket Guide to Small Business Success - Rob England )