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Reducing Expenses: How To Maximise Margins Without Compromising On Quality

In the aftermath of Covid-19, many businesses are looking for ways to save money and lower running costs. If you’re a business owner, and you’re keen to reduce expenses without compromising on quality or service, this guide is packed with useful advice. 

Outsourcing

Outsourcing has become increasingly popular in recent years. The aim of outsourcing is to enable access to services and skills you don’t have on-site. Outsourcing provides an alternative to hiring or offering long-term contracts, and it can be incredibly cost-effective for businesses of all sizes. Before you sign any agreements, think carefully about what you want to outsource. Outsourcing should allow you to access skills you don’t have in-house and it should also free up time for you and your core team to focus on the fundamental elements that underpin the daily running of the company. If you manage a healthcare business, for example, you want your staff to devote their time to caring for patients and handling enquiries. If you choose to outsource aspects such as cleaning, for example, you can take advantage of professional cleaning services and ensure your team has as much time as possible to tend to patients and oversee the smooth running of the practice. 

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Negotiating

In business, negotiating is one of the most critical skills. To produce, distribute and sell products, you may come into contact with several different companies and individuals that form part of the supply chain. At every stage, it’s beneficial to try and get the best deal. If you can save money on the cost of making, distributing and delivering products, your profit margins will increase and you may be able to offer your customers more competitive prices. Look for opportunities to cut bills and negotiate more attractive offers with businesses you have ties with and those with which you’ve established strong, long-lasting relationships. Bulk buying and placing larger orders is often an effective way to bring the unit cost down, so it’s wise to explore options like wholesale chemicals and bulk deals on ingredients, equipment, parts and supplies, as well as investigating trade discounts. When you’re negotiating, it’s crucial to research the market and check prices to make sure you have realistic expectations. If you go in too low, this can set the wrong tone. 

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Remote working

Over the last few months, businesses up and down the country have been operating with teams based at home. Working from home is not a viable solution for every company, but there are advantages. If your business is able to function effectively with employees working from home, the cost savings can be significant. Employers can reduce travel expenses dramatically, and it could also be possible to eliminate outgoings in the form of rent. If your employees have been working from home during the lockdown, use the experience to shape the way you work in the future. Speak to your employees, ask for feedback and opinions and analyse data related to sales, output and customer service. Some people prefer to work from home and they find that they are more productive, while for others, the prospect of going back to an office will be more appealing. 

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Technology

The pandemic has highlighted the importance of technology in business. Many companies have been able to stay afloat during lockdowns by using virtual communications and offering customers the chance to order online. If your business is behind the times in terms of the tech you use, investing in new equipment, machinery or software could save you money, as well as enhancing customer service and making life easier for employees. Technology can often be used to accelerate and streamline processes and it also minimises the risk of mistakes and provides new opportunities for employees and customers. Video conferencing technology enables employees to engage with colleagues and clients without spending any money or leaving home, apps and QR codes enable customers to access information and place orders at the touch of a button and cutting-edge machinery facilitates efficient, cost-effective fabrication of products. Match your investments to the type of business you run and your primary objectives. 

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Running a profitable business doesn’t depend solely on bringing in money through orders and sales. It’s also essential to keep an eye on outgoings. If you’re looking to maximise margins by reducing expenses, there are several ways to do this without compromising on customer service or quality. Consider outsourcing, look at ways you can adapt to remote working, negotiate better deals with suppliers and distributors and explore technological investments that could save you time, effort and money. 

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