Ask many people how they would increase their profits, and most will tell you that you just need to sell more stuff. They are right, of course, but to boost your bottom line, you should also look at reducing the cost of each of those sales. Today, we’re going to look at a broad range of factors that can add value to anything you sell. Most are easy to put in place, and you should see better results in a short time. Let’s crack on and find out what they are.
Cost of staff
One of the highest costs of running a business is the people that you employ. Not only do you have to pay them a wage, but you also have to make contributions to their health care, give them benefits, and pay to train them up. It’s an expensive business, and the main reason a lot of companies like to outsource to contractors. Think about this then next time you have a recruitment drive. Although contractors can be more expensive in the short term, you only use them for what you need. You won’t have to train them, other than briefing them about their tasks. And, it’s a one-off fee that can immediately be attributed to your cost of sale, rather than an entire years salary.
Make sure all of your staff are doing tasks for you that actually have value. For example, if you have a hotshot sales person, make sure that all they do is sales. Don’t have them wasting their time writing up a report that you could pass down to a part-time support assistant. Similarly, if you are finding yourself checking everybody’s work all of the time, stop for a second. You are either micromanaging or have hired the wrong people. Neither of those situations is making the best use of your time.
Your inventory costs money. Purchasing it, using it, transporting it and storing it all makes up part of your cost of sale. So, if you can start to run a tighter ship, you will find that your cost of sale drops. Some good multi channel inventory control software can help get a tighter grip on your stock levels. It will help you become a leaner business, that only holds what it needs and orders when it needs to. On a single product sale, it might not seem much. But over the course of a year? A more organized stock system can have a positive effect on your bottom line.
Is your marketing effective? A lot of companies these days waste hours of the day trying to get engagement from a social media ‘fan’ base. Here’s a quick tip - you are wasting your time. Your business - or brand - isn’t something people care about or wish to engage with. And, if they do, they are probably making a complaint. This isn’t to say that there haven’t been social media successes, but you have to define what success looks like. If you are getting sales or sign ups, then great. But if you are wasting time by sharing pictures of cats, then it’s all pointless. Make sure that all your marketing efforts are focused on the right things, and you will see your cost of sale drop into the profit-boosting territory.
We hope this has helped - let us know if you have any other suggestions about cutting costs for your business.