As a new business owner, you need to examine every dollar you spend on your business. Each day, you must ask hard questions about where to put your money to create profit and growth.
While the profit and loss numbers can be exact, you may not see the other data that holds you back. For example, what if you realized that you are losing up to 20 percent of your revenue to waste? It happens more often than you would believe.
Working with hundreds of businesses over the years, I have discovered several tips to reduce waste and expenses that are adaptable to any organization. Here are eight ways to help you reduce waste and expenses in your business:
Optimize your supply chain: Streamlining supply chains can reduce the time and resources needed to get products or materials. Why order more paper or parts that eat up valuable space in your storage area? Every extra step workers have to take to move it or walk around adds up. Consider implementing just-in-time inventory systems and using local suppliers to minimize transportation costs.
Use data to make informed decisions: Collect data on your business processes at every stage: from phone inquiries of potential customers, to your people in the field, to the warehouse. Next, leverage this data to identify areas of potential waste reduction, efficiency improvements, and gather the pertinent information.
Nancy Sievert works as a business systems consultant who understands how to implement these tips and monitor their effectiveness to create more profit growth. You can find her on LinkedIn at: linkedin.com/in/nsievert
Train employees well: Stop thinking of this as an expense with little return on investment. Proper training for your employees can help reduce mistakes, increase productivity, and minimize waste. It also makes employees feel more valued when you invest in them.
Automate where possible: Automating repetitive tasks frees up time for employees to focus on more critical tasks. Think of any time data is inputted more than once, then merge those processes. You’ll reduce the number of manual errors from skipping steps or transposing digits.
Go paperless: This is a hard habit to break when you’re accustomed to writing down orders and passing them to co-workers. Switching to digital documents can save money on paper, ink, and printing, while giving you instant access to information and saving valuable employee time. Plus, it’s better for the environment!
Maintain your equipment: Regular equipment maintenance prevents breakdowns and extends your machinery’s lifespan. Ultimately, it reduces the need for costly repairs or replacements, so your shop keeps running smoothly.
Monitor energy use: Monitoring and managing your energy use can lower your utility bills significantly. The more energy costs go up, the more these savings matter. Gather financial data to track the impact of energy-efficient lighting or a programmable thermostat. By unplugging devices not in use, you’ll also stop using as much phantom power.
Leverage packaging to build a brand: Minimize the amount of packaging by finding more efficient options or using biodegradable materials. Swear off Styrofoam. Instead, offer consumers a chance to be part of the solution. Invite them to return branded, reusable plastics (coffee cups or shopping bags) for a discount.
By implementing these eight tips, your business will be more efficient and profitable. Each one takes systems and processes to stay committed to the steps you take. Otherwise, you find yourself right back in those old habits where your time and money have less impact.
