5 Tips to Reduce Cost & Boost Profitability

Sometimes, overspending can hurt your profitability despite your record sales.

Profitability doesn’t only come from sales numbers. Also a profitable business isn’t always the one with the most customers and the highest sales.

The sign of a business’s profit depends on what’s left in the account at the end of the month or the fiscal year.

It’s important to account not only for the money coming in but also the money going out. That’s why cutting costs is one of the best ways to boost profitability… assuming that you do it right.

 

Tip #1 – Address Material Costs

Product sellers are concerned with raw material costs. That’s why increasing profitability can be as simple as lowering manufacturing and or development costs.

You’d be surprised at how much this move can make your business profitable.

 

Tip #2 – Reduce Labour Costs

Can automation system replace something in your business?

Have you considered hiring a Voice Assistant as opposed to an on-site assistant?

Reducing money spent on wages can also boost profitability. So, evaluate the daily tasks that your team members perform and look at some of your own duties as a business owner.

Outsourcing is one of the best ways to cut costs. It’s also one of the smarter ways to hire as you may have access to a wider pool of experts.

When properly executed, you can lower costs and maintain a high level of quality with outsourcing.

 

Tip #3 – Manage Expenses

Many businesses are overpaying for marketing.

For example, hotels may work with a variety of travel agencies even though a couple of them may be bringing in the bulk of the bookings.

In that scenario, it may be a good idea to drop the non-performers.

The same principle applies to all other expenses and services. If you pay for things and they don’t end up improving your business or what you offer, these may be expenses worthy of the chopping block.

 

Tip #4 – Know What Costs to Cut

Most business owners don’t know where to start. If you’re one of them, it’s ideal to start by performing an internal audit of your finances.

Identify where all the money comes and goes and decide what you can or can’t cut.

 

Tip #5 – Get Better Deals

Many industries work with vendors, which happens to be a great area to look at if you want to boost profitability.

You may already know that it’s possible to renegotiate vendor contracts, though it’s easy to be put on the back burner. Getting better deals, however, doesn’t always have to involve other vendors, as you can also leverage your relationships with existing vendors.

You can even consider changing service providers and utility contracts.

 

These tips are particularly helpful to anyone operating a cash flow-dependent business. That said, they apply to both B2B and B2C companies looking to boost their bottom lines.

7 Tips on Improving Your Time Management for Business Owners !

 

Time is like money: you need to know how to invest it in maximising your returns.

Building a business requires you to put many hours in undoubtedly, but the real key is to work smarter, not longer. By carefully managing your time, you can ensure that you achieve your goals without suffering from burnout.

Let me walk you through seven easy time management tips to ensure that your business runs like a well-oiled machine.

 

1. Plan Ahead

Planning is investing. There might be an upfront cost, but you could see a tenfold return further down the line. Nine out of ten times, a haphazard, unplanned approach is ineffective and does not yield the same results. Planning helps you remain focussed and allows you to measure your progress. It doesn’t just apply to your long-term business plan but to short term goals too.

• Write out a rough schedule each Monday
• Figure out what you’re week is going to look like
• Take time each morning to sit down and plan your day

 

2. Use Productivity Applications

Productivity Applications help to manage your time effectively. They assist in operating to-do lists, prioritising tasks, and meeting deadlines. These applications time your tasks which will eventually help you in boosting your productivity. Some of these apps are:

• Toggl
• FocusKeeper
• Clockify

 

3. Delegate

Business owners often feel as though they should do everything themselves, especially small business owners. But delegation is essential for optimal time management. Outsourcing and delegating tasks allows you to manage your time effectively. Concentrate on your areas of expertise rather than the admin tasks that another team member could easily handle.

 

4. Saying NO

Don’t take on more work than you can handle. You might overwhelm your business and ruin your reputation. One of the essential parts of time management is knowing when to say no. If you don’t have time to complete the project to the best of your ability, it’s better to turn it down than do a lousy job.

 

5. Don’t be tempted to Multitask

Multitasking might seem like a great way to save time, but it decreases your work’s quantity and quality. Its wiser and time-efficient to focus on one task at a time and work methodically rather than trying to juggle. When your attention gets divided in multiple directions, you’re much more likely to make mistakes that you’ll have to go back and fix later.

 

6. Be Honest with Yourself

We don’t admit that they waste valuable working time on Facebook, Instagram, Twitter, Snapchat, but you’re only human. It’s better to be aware of your weaknesses and actively work on fixing them rather than allowing them to drain on your precious time.

• If social media sites are your weakness, use blocking software so that you can’t access them during working hours.
• If there’s an overly chatty colleague who keeps distracting you, why not try wearing headphones?
• Or, if you struggle to stay motivated on a Friday afternoon, prepare in advance and ensure that all-important tasks get completed ahead of time.

 

7. Prioritise Bookkeeping

“A stitch in time saves nine” – that’s especially true when it comes to bookkeeping. If you put your books on the back burner now, you’ll certainly pay for it later. Fixing bookkeeping mistakes and trying to fill in the gaps is a real-time vacuum. Make bookkeeping a priority and take the “little and often” approach. It’s worth investing in an online bookkeeping software program to help you, such as QuickBooks or Xero.

You budget your money carefully, so be sure to take the same approach to your time. Careful time management makes each hour go further, giving you more opportunities to focus on what matters to you. Effective time management has the added benefit of reducing your stress levels and staying focused, which has a positive impact on your personal life and your business.

 

About Us –

3ES Accountants Ltd aims at Saving your Time and money while providing Economic, Effective and Efficient solutions to your business needs.

3E’s Accountants are certified by the Association of Chartered Certified Accountants (ACCA) and have been operational for the last ten years. We are one of the presumed bookkeeping firms in the UK because of the number of long periods of involvement and tremendous information on our business. Accounting, Advisory and Financial are the services 3ES Accountants provide.