Sweat the small stuff22nd June 2022
Buying stationery for the office is one of my pet peeves.
Whenever it’s time to make the order, I spend ages questioning the costs and personally checking the prices of alternative suppliers.
I know it drives my staff quite mad, but this is a very competitive area - and I’m convinced that there are savings to be made.
Right now, many businesses are looking at how to cut costs in a sensible way.
This is an increasingly tough economic environment, and business costs are rising fast. This means that we all need to act quickly to maintain our margins, so our businesses remain profitable and healthy.
For many this means raising prices. For others, it will mean cutting expenses.
When this is the case, the temptation is often to look first at “big ticket” items - the largest costs you have, which often means your payroll.
But this carries risks and has to be done very thoughtfully. If you cut key parts of your business it can damage your momentum and your ability to operate smoothly, ultimately slowing your growth.
It’s also often not the case that simply slashing one or two big expenses will restore your profit margins. It’s a bit like cutting sugar from your diet won’t cause you to lose 20 lbs, even if there are health benefits.
What’s going to work is a combination of cuts, including looking at many smaller expenses which you normally wouldn’t pay attention to...
...From your stationery to your utilities and other direct debits, the orders made by the junior managers, everyone’s expenses - and more.
After all, these little “bits and pieces” likely make up the majority of your expenditure.
And they’re often the source of enormous waste.
These kinds of smaller expenses often don’t require approval, and are made without a great deal of thought.
Where there is oversight, they’re often rubber-stamped because people feel that £100 or £1,000 here or there “doesn’t matter”.
And those making these orders often can’t see the big picture for your company. They buy what they need, but they may never question whether they’re ordering a duplicate, whether it’s the best value for money, or even whether it’s a priority for the business overall.
So my rule is, you should “sweat the small stuff!”
Or, to use another cliché, every penny really does count.
Short-term, when you come to cut costs, make sure that you’re looking over a full list of expenses - and don’t just focus on the biggest numbers. Cuts you make much lower down the list are not a waste of time, they’re the key to running a tight ship.
And longer-term, make sure you have a process in place to control those smaller expenses on an ongoing basis, so that they are made deliberately and thoughtfully - never casually.
If that’s the kind of system you’d like to put in place, please do get in touch.
Helping you control your costs is a key part of the work we do when we manage your finances. After all, we’re here to maximise your profitability - and you simply can’t be highly profitable if your expenses are inflated.
Simply hit ‘reply’ to this email or call us on 01279 647 447 to arrange a no-obligation chat. I’ll get right back to you.