Making sales is key but sometimes the key to greater profits in business is more than just getting more cash in the door. If you are spending too much on your outgoings then simply looking at how you could decrease these can make you a lot of extra cash.
If you are not adequately monitoring your cash flow then how can you identify where things are going wrong. You can categorise how much is going out in different categories and you can work out your net and gross profit and it’s important to know the difference between these. Gross profit is what is made directly involved with a sale, so if you buy in stock and sell it then that’s the gross profit. Net profit is a more overall measure which takes in all your fixed overheads, such as rent, utilities, vehicles, salaries, etc. So it’s key that you take this into account as a common error in business is to neglect the real cost of these overheads and be under the false impression that your business is profitable when you’ve only taken account of gross profit.
Shop Around For Good Deals On Utilities
So the first place we will look at making serious savings is on utilities and these can be big in business, from electricity, water and gas you can be spending huge amounts, especially if you are running multiple locations. It’s easy to compare and switch these using online comparisons such as Save energy comparison and for the short time spent on this kind of exercise, then it’s worthwhile even if you only save a little on it.
Get The Best Deals On Vehicles
Your fleet of vehicles are always going to be a cost, of that there is no doubt, but how much of a cost can vary. If you choose to buy second-hand vehicles you can, of course, make a big saving on the purchase price, but there is always an element of risk in this strategy. If you go for a business car lease this may seem more expensive on the face of it, however, if you get the right deal and have servicing and other costs included it could be better in the long-term and at the very least you know in advance what your costs are.
Check Your Insurance Providers Annually
In a similar line to checking your utility providers you can get a better deal if you shop around for insurance providers, be it liability, content, stock, vehicles, etc. One thing that you should check as well is the level of your cover as your business changes, your level of cover for liability or stock or machinery could be needing to be upgraded or you could find yourself with inadequate cover.
Ensure You Are Getting The Best Deals From Suppliers
Everyone does a competitor analysis as part of business planning but often neglect to do a supplier analysis. This will allow you to check if you are getting the best deal and see any new developments from suppliers you don’t normally use. Also, if you are expanding then use any increased volume to negotiate better prices even if you are not changing supplier.