Ways to reduce operating waste and lower costs
Key points in this article
- Outsourcing some jobs or tasks
- Cutting admin costs
- Reducing utility expenses
As your business grows, your costs will increase – it’s inevitable, especially in the areas of staff and materials. But with a bit of creative thinking, there are ways to keep operating costs down.
Being efficient with stock
If your business is growing, consider buying stock in bulk, as you’re often able to negotiate good deals from suppliers.
However, it’s also important to reduce the amount of stock you have on hand if it’s not needed, so if you decide to buy in bulk, it should be with the knowledge that you’ll be able to sell it.
Outsource some jobs
Managing your own payroll and staff as a small business owner can add extra stress to your already busy work life. Outsourcing your payroll and even contracting out some staff jobs will free up more time to focus on:
- growing your business
- increasing profits.
You might also be able to hire offshore staff for less, with the savings invested in replacing assets or venturing into new markets. Your internal staff may also have more time to focus on their core tasks, making your business more efficient.
Outsourcing certain jobs can offer benefits like savings in costs and less stress
Reduce your material costs
What you’re aiming to do here is watch your operations closely, so that you can devise and put in place measures that’ll help reduce waste and increase productivity.
Review your processes
Minimising waste and increasing resource efficiency not only benefits the environment but also makes business sense as well.
Take a look at your manufacturing or assembly process to gain a clearer idea of how much raw material is being wasted throughout the process.
Cut your admin costs
There are always opportunities to streamline or remove some administrative procedures so that you can:
- cut costs
- save time.
Make a conscious effort to phase out paper (and as a result the costs of ink, printers and printer maintenance) by creating electronic versions of all your important documents. Then, back them up in the cloud to ensure you have more than one copy.
Take a good look at your administration costs and decide where you could reduce them
Engage your employees
Take time to share your waste reduction plans with your team. Better still, involve them in the discussion from the beginning. Gather your staff together to:
- ask for suggestions – they’ll likely come up with a number of ideas you hadn’t considered.
- create waste reduction incentives – all employees need motivation to maintain a change in procedure without slipping back into old habits.
- set up a training programme – if you’re planning to overhaul established methods.
Trim down your utility usage
As your business grows, the costs of communication and energy can quickly spiral out of control if you don’t have a plan to keep them down. Depending on your type of business, you might have landline, mobile and Internet costs to pay each month.
Can you eliminate landline costs altogether? Is your business making full use of free online communication options?
Whatever you can utilise to become more eco-friendly can also help lower your costs and your bottom line. To decrease your business’s energy use, consider:
- installing eco lighting solutions.
- turning off inactive machinery and office equipment.
- programming heaters.
- conducting an energy audit to see what you can improve.