Businesses are being impacted in many ways by the rising cost of living. Across Europe, organisations are looking for new ways to save from rising energy bills to higher supplier costs.
There’s good news: European governments say prices will drop by mid-to-late 2023, but there’s no guarantee, so businesses face a costly road. Customers are becoming more conscious of their spending habits, so putting prices up isn’t always a good idea.
No one solution fits all businesses. To maximise budgets and prepare for the future, it’s important for you to sit down and assess where costs can be reduced.
What is the best place to start? Our top four areas for cost reduction are listed below.
Make sure your spending is under control
Spending smart is our first priority. Many costs go unnoticed by us day-to-day, but when you crunch the numbers, there is always room for savings.
To begin with, make sure your financials are fully visible. This will allow you to identify unnecessary expenses and keep track of all business costs. As you gain insight into your habits, you will be able to prioritise what’s needed for your business’ growth. Once you have outlined everything, you can use that to predict upcoming expenses. You’ll then be able to stay on top of your outgoings regardless of fluctuating costs and purchases.
Spending less on non-essentials is the first step towards building savings, but your next move should be maximizing the money you do have. It’s worth investing your time in looking for the best deal, whether you shop around or negotiate a lower price as a loyal customer.
Although these conversations may be difficult at times, you may develop a new working relationship that’ll serve you well in the future.
Check out your local area
Buying local is sometimes more expensive up front, but sourcing nationally, or internationally, can have hidden costs as well. These unexpected expenses can be eliminated when you look locally, while the quality stays the same – or even improves in some cases.
Take the time to find the right supplier. You’ll save a lot of money in the long run by looking for the right supplier.
Get rid of waste
Cutting costs by eliminating waste is another great way to save money, big and small. Take a look at how your business uses energy, and whether you can do it more economically. With fuel and energy prices skyrocketing, this is even more important.
Whenever you’re not using something or at the end of the day, switch it off. You can also lower costs by switching to LED bulbs, turning down the heat, and investing in better insulation.
When investing in energy-saving technologies, implementing energy-saving policies in the workplace can be costly at first. In order to determine if this is the right move for your company, weigh up the pros and cons.
Making business smarter
The cost of your business can be managed and minimised by making a number of changes. It’s important to sit back and think smartly about your spending – and weigh up which costs are essential vs those you can cut.