We live in uncertain economic times, with operating costs still on the rise. By focusing on cutting expenses and growing revenue, you can stay ahead.
A recent survey showed that 93% of respondents believed changes made by the Government had increased their cost of doing business. And rising costs can have a significant impact on your cashflow and bottom line.
Here are some ways to reduce your costs and increase your revenue
When costs are rising and profit margins are falling, that’s bad news for the financial health of your business. But there are ways to combat this scenario.
In short, you have two main tactics to kick into gear. You can either look at cost-cutting across all your operating expenses, or you can find ways to sympathetically boost your revenue.
Strategies for cost reduction:
- Streamline processes – Identify inefficiencies, automate key tasks, and trim excess to reduce operational costs without sacrificing quality.
- Negotiate with suppliers – Renegotiate contracts for better terms or bulk pricing, while keeping suppliers’ pressures in mind. Consider alternative suppliers to keep prices competitive.
- Reduce your energy consumption – Putting energy-saving measures in place, like LED lighting and energy-efficient equipment, is a move towards good sustainability, but can also help you save money.
- Manage inventory effectively – Keeping your inventory lean is a good way to optimise inventory levels and minimise your holding costs.
Strategies for increasing revenue:
- Expand your customer base – A broader customer base helps to bring in more sales and revenue. Explore the potential for entering new markets or customer segments, and boost ecommerce and digital marketing to sell more online.
- Raise your prices strategically – Think about the demand for your products/services in the market and revise your pricing to keep it competitive. Be sure to communicate any price increases sympathetically to customers, so you don’t damage customer loyalty.
- Introduce new products or services – If your current products/services are not selling, it could be time to diversify to meet changing customer needs. Use your existing resources to innovate and meet demand.
While you can’t wave away economic pressures, a proactive approach to cutting costs and generating revenue can protect your business.
We’ll help you review your current financial and business strategies to look for the best possible opportunities, whether it’s better cashflow management, cost-cutting or revenue generation.
About Pathfinder Solutions
Pathfinder Solutions advisory team members have either owned or managed businesses, or are investors themselves, so we know first-hand the challenges you face in your world.
Sure we’re Accountants, but the best solutions in business come from focusing on more than just the numbers. Our real-world business experience delivers just that.
