January is behind us, and now it’s time to hit the ground running so that 2018 is one of your most profitable years yet. First, it’s worth identifying which part of your business may be losing money.
Cutting costs and efficiency
Maybe too much of your profit is buried under inefficient practices, expensive financial or service contracts or outdated machinery. Your staff might not be used efficiently and the burden of unproductive work processes that were established years ago are likely to be costing you thousands.
It’s not difficult to find savings when you look around your office, plant or books and ask, ‘Why do we do it that way?’
While the cost and effort of replacing old equipment might seem beyond your reach, or the disruption is too much of a hassle, think about the benefits such as higher productivity and cutting the costs of maintenance to keep things running.
By far the biggest office culprits are copying, printing and paper costs – not to mention storage. So next time you are about to hit ‘print’, really question the necessity. It may cause you to look at your storage and retrieval process where the potential savings may be significant. It might surprise you to discover how cheap and efficient the cloud is.
So take a walk around the car park, the plant or the office. See what you can replace, sell or update, do a cost analysis and take some action.
Get a team together and look through insurance policies, interest rates on business loans, supplier terms and telecommunications contracts. You will be surprised at the savings you can find just by shopping around for a better deal.
Every dollar counts, and shaving a few points off interest, extending payment terms or getting a discount for loyalty or volume from a supplier, and slashing telecommunications costs by exploring online alternatives can quickly add up.
All service and financial contracts should be reviewed regularly. And while you have the books out, it’s worth keeping an eye on the difference between the budget and actual expenditure so that you can spot issues, such as oversupply, at the early stages.
Getting the most out of your employees
But by far the most productive resource in your organisation is your talent. So you want to make sure they are not distracted by non-core tasks.
It is worth auditing your processes to expose areas where there might be double handling or inefficient use of your staff. For example, are your professionals being burdened by unnecessary administrative details that can be covered by hiring or outsourcing these tasks?
The gig economy is much more mature in 2018, and there may be new or old tasks you can outsource so that your talent can stay on top of their core work. It makes little sense to have administration staff spending hours on marketing when it can be handled by experts.
So while it’s tempting to start the year thinking about the contracts you are chasing or trying to retain, don’t neglect the profit to be found in making a few small changes.
If you want to find out more about equipment funding read: Which type of equipment financing should you choose?