Being able to understand the net operating cost of your business and find strategic ways in reducing cost allows your business to maximize the cash flow gained from operationg costs. Here are 10 ways any business can review their operating cost and increase cash flow.
1. Review and reduce supply expenses.
Review your office supplies and seek out vendors that offer the same product for a greater reduction in costs charged to your business.
If you have a sense of loyalty to your vendors negotiate long-term contracts for a reduction in product discounts.
2. Cut production costs.
Seek out ways to optimize your resources and cut material costs.
Consider ways to sell leftover supplies that your business has no more use for, however, can still be sold to consumers or other businesses, with even a possibility of making another product to market.
Evaluate your current property, is all the same being used productively towards the function of the business, if not rent out the extra storage spaces.
Measure and track the efficiency of operating your business, establish performance trackers to keep your business on a trend showing performance.
3. Review and lower financial expenditures.
Review your insurance policies, compare vendors, and other financial accounts to save money by asking for a match rate or better rate.
Consolidate policies
Avoid unnecessary debt through conducting a cost-benefit analysis for forcasting future business ventures.
4. Update your marketing efforts.
Continue using paid advertising that has been proven to work, however, don’t rule out other options that are less expensive in building your clientele.
Use a referral program from your current customers with incentives and help them to become raving fans about your business to create a culture of followers and clients.
Develop plans to prioritize networking than advertising to create personal business exposure.
Identify areas that need to reduce outsources that still increases productivity and performance of the business. For example, keep the high-ticket closes in-house as they produce the most revenue and are more training in handling these clients.
Increase your socia media campagin, to reduce traditional marketing that could be costing the business money where it could be used towards more effective strategies.
5. Utilize time strategies that are effective and efficient.
Studies have proven that 80% of business time is busy work that does not lead to the real gains of a business and that only 20% of the business time acuatly produces the majority of the revenue.
Minimize distractions, a single distraction, like a Facebook comment can cause people to look attention focus on a task for a minimum of 11 minutes before regaining tracking on the task at hand.
Track employees productiveness with technology to locate actual performance and maximize productivity.
Develop expectation and deadline that are accountable with both reprocusions and rewards for early completion of a product or project that still represents high-quality.
Establish an outline of meetings with blocks of times associated with topics to keep the meeting moving forward and on track.
6. Use technology to optimize virtual business practices.
Virtual meeting like Zoom and other software products all conferences to still be held while reducing travel cost and time.
Share document through a cloud product like Google documents so teams no matter what location can update the document while continue to work at an off-site remote location.
7. Narrow the scope of the business to focus on the essential services.
Having the ability to focus the business attention on products or services that produce the successful stream of revenue needs to be the focus of the business. One prime example is Apple Inc. and Steve Jobs when returning to cut products that were wasting time and money.
Outsource items that are not the focus of creating revenue for the business. Identify what task produces the most revenue and examine what task could be outsourced to focus attention on the revenue producing tasks.
8. Organize your workspace and business layout.
In your workspace organize your area from items that are most commonly used to items less commonly used. If you feel lost in this area, help is available, space efficiency advisors help people do just this.
In the business identify area that can be optimized for usage to prevent spastic locations of the business. For example, use the board room as a break room, to optimize space usage.
9. Know your employees.
Identify what employees are good at which tasks to optimize their strengths, however, mentor their weaknesses with other employees that have those strengths to create a culture of cross-training and growth.
10. Quality is a priority
Quality being one of the most reviewed items from consumers to return to a company for a product or service, is an area that will create customer loyalty.
When quality is optimized, prices can reflect the product or service a customer is purchasing.
In the review of these topics, being able to understand your business both from an external and internal aspect can enable you to identify the strengths and weaknesses that need focus to grow your business and increase cash flow. If you would like to see how we at Strategiez can help You, feel free to reach out to us.
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