Cutting costs
There are only two ways to improve margins; you either charge more or you spend less on production.
In today’s tough economic climate, the former just isn’t a realistic option for most business enterprises, so everyone is busy cutting costs in an attempt to stay competitive. But some of the most obvious cost-cutting measures are very often not taken by small businesses as they’re seen as too trifling.
Cutting down on expenses like meals and hotels, or even the small things like stationery items can make a real cumulative difference. Depending on the type of business you’re in – just the smallest cut in costs can often enable you to cut sale costs by tiny amounts which make a huge difference to sales. When all other factors are held equal, price is the only important variable. And in today’s lean times, buyers are looking at price before other factors more than ever before.
Fuel costs can also be a big potential area to make easy savings. If yours is a high mileage business, then driving so as to conserve fuel and ensuring that all staff do the same can make a real difference. Anticipating congestion and timing your journey accordingly or taking another route can help.
Then if you do find yourself in a traffic jam, turn off the engine. Even if the car will be stationary for 10 seconds or more, this has been shown to be worthwhile. And always try and drive at the optimal speed. This was always thought to be 55 mph, but it’s recently been suggested that 40 mph is better for fuel economy. In short, driving more steadily and slowly and planning journeys better will save money on fuel and wear and tear. Vehicle costs are often one of the single biggest costs for small businesses.
Or, if you need to invest in new vehicles, a little up-front investment in hybrids or other fuel-efficient vehicles can make a real difference to on-going costs.
Do your research here, too. For example, Honda has been shown to be the most reliable car on the UK’s roads according to a recent “What Car?” survey.