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Why Reducing Costs Is Vital For Your Business

31.03.18

All businesses have overheads, but for small businesses, managing costs can be difficult. While we do recommend seeking the support of a purchasing services specialist, there are ways that all businesses can save themselves money and reduce their overheads.

Start with the obvious

While small costs can accumulate, the obvious place to start in reducing costs would be with the most expensive purchases. Review how much you spend on utilities, insurance, travel and any essential business-related costs. While there may be some things you can’t change (for example, if you work out of a premises where utility costs are included in the cost of the space you rent, you can’t reduce how much you spend on your utilities), taking a new perspective and finding new ways to cut down costs is a good place to start.

Negotiate better deals

Don’t be afraid of asking for a better deal. Negotiation is an art, but even if you’re not used to trying to create deals or negotiate, it’s always better to give your current resource or service provider a chance to offer a better deal or arrangement. This is done both out of respect for your previous dealings and in case they really can do better, which would save you time and effort spent switching to another provider.

Don’t be afraid to walk away

It may be difficult to walk away from a business you’ve used for one particular service or resource for a long period of time, but if you can’t afford to utilise their services or products anymore, then you need to put the future of your business before your comfort zone. Unless walking away seriously jeopardises your standing with other businesses, then sometimes walking away and sourcing what you need elsewhere for less is the only option you can take to help reduce your business costs and secure your business’ financial future.

Understand that costs fluctuate

Costs do fluctuate, so while being proactive about overheads is good, switching providers due to a small jump in price once may be overzealous at best, and foolish at worst. Prices and costs depend on a lot of things, and the best way to discern if you need to look elsewhere for certain services or resources is to measure if the increase in costs is steady and gradual in its incline, to keep an eye on the financial forecast and to regularly compare prices against other providers, even if you’re not actively looking to switch from your current provider.

If you would like to find out how NJG can support you with your cost management, please get in touch today. Call us on 01257 232602 or email neil@njgpsl.co.uk.

SIX REASONS YOUR OVERHEADS ARE SPIRALLING AND WHAT TO DO ABOUT IT

At NJG Purchasing Services Ltd we believe that there are many basic tips and tricks which can help to reduce your company overheads with almost immediate effect.

We have produced an ebook to guide you through some of the more basic methods which you can implement alongside using NJG Purchasing Services.

Download

Book an initial consultation with neil

As a procurement specialist for more than 30 years, I get the frustrations you face. Growing a business is complex and challenging, but don’t let high costs be your downfall.

No matter what size your business, any inefficiencies you have now will only get bigger as you grow. Getting lean and resourceful as early as possible, will enable you to build an efficient and streamlined business for the future


We understand how frustrating it is when you know your overheads are high, but you don’t have the resources or expertise to get them down.
That’s why we do it all for you.

Book now