Reducing Business Costs Effectively

Possibly one of the most over looked aspects of finding ways to increase bottom line profit is the cost of office supplies, office equipment, and services that the business uses every day without a second thought. The business owner and employees will some times just not pay attention to the costs of these things since they use them daily and feel that they can not operate the business without them. This is very true, however whether this is a new business or a well established one when it comes to increasing bottom line profits these things are a very large chunk of the companies operating expenses and they need to have strict controls and limits placed on them or they can quickly become overwhelming to the bottom line. Depending on the size of the business the owner should be the one keeping tabs on these things or in the case of a larger operation then an office manager should be responsible for these costs as well as reporting back to the owner directly on a regular basis to keep them inline with the business plan. With this in mind lets take a look at some ways in which these costs can be reduced and controlled.

As stated above these costs and a detailed list of needs should be in the company business plan. Plan not only for the things that the business needs now, but also for any future needs. For those anticipated future needs assign an employee or yourself if this is a sole proprietorship, to keep a close eye on those sale papers that are in the newspaper, e-mail, mail box, etc., when these things do need to be purchased get them at the lowest prices possible, even if the business does not need them for a short time.

Especially when setting up a new business try looking around for things on the list that can be purchased used, but in good condition. Look in places that used office equipment and supplies are usually advertised, such as, newsgroups, message boards, classifieds, thrift stores, and yes even those neighborhood garage sales.

Use the art of negotiation even in those office supply stores that you may think it to be a waste of time. It will only be a waste of time if you do not try to get a lower price. You would be surprised how often when you simply start a conversation with the sales-person or manager you will gain knowledge that most customers do not know. Like you may be looking at a piece of equipment or even supplies that when the store sells out their current inventory they are not going to stock that particular brand any longer and since they only have a small quantity left if you take the balance off their hands you can have them at half price or possibly even lower. Maybe they have a unit that is slightly damaged but works just fine and still comes with the full manufactures warranty and here again you will get this at a much reduced cost just so they do not have to send it back and wait for credit. I am sure you have heard of the old scratch and dent sales.

Another cost effective method is "never" be satisfied with just one supplier. Look at all the possibilities available to you and shop around. Again watch for those deep discounted sales as well as playing one against the other for better deals. While keeping in mind the level of quality as well as the price.

For those special projects which will require the business to get a particular piece of equipment that will be needed for a short time forget about buying it. Look for a rental store that has this equipment or better yet check around with other businesses or friends that you may be able to just borrow it for the time that is needed, even if you need to promise to lend something to them in the future if they should have that need.

Put your pride aside, and do not be ashamed or embarrassed to take advantage of all the "free" offers that are always floating around the on-line and off-line world today. Face it businesses are fighting for your money. They offer you "free" supplies or equipment just so your business will keep them in mind when your business needs what they have. There is also those "free trial" phases where you can try something for a length of time then say no thank you, unless of course that product or service is just what you need and theirs works great. Then all you will need to do is negotiate the best deal for your business.

The times are changing somewhat but those Bulk Wholesale Clubs/Stores are still out there, many have just started letting the general public in as members instead of just businesses. Yet they are still a great source for getting low prices on things that any business may need. You just need to be careful that the price is "really" as hot as they want you to believe since you are required to buy in bulk for those prices. The annual membership fees are generally low enough that if you make just a few purchases per year you can more than save the cost of joining.

Reducing business costs effectively can also be done with the many auctions that happen every day on-line, as well as offline. Watch for these auctions and before you pay retail for your needs go armed with the knowledge of the retail price and if you can bid on your needs at a much lower cost go for it. Also watch for those office supply stores that may be going out of business which happens often and you could get some fantastically low prices.

A trendy thing to do in this era is to network and barter with other businesses that are not competition but complement your product or service. Injecting either or both of these methods into your business plan can significantly lower your business costs in more than one way. Sharing in all marketing and advertising costs will immediately reduce your costs in half. You could share your trade leads and mailing lists which widens the customer base for both businesses. Exchanging products/services with each other will also reduce the costs significantly for both.

In closing as stated earlier whether your business is new or long standing and well established reducing business costs effectively is critical to any business. That is if that business wants to have a profitable bottom line consistently. As in any business plan you must be willing not only to make the plan but constantly monitor the plan and make changes as needed in order to keep costs down and profits up.


Copyright © 2006 Roy J. Keller (All Rights Reserved)

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