Dear entrepreneur, how do you feel each time ‘the records’ show that your revenue has significantly increased and your profit margin is wider than expected? Elated, happy, ecstatic… good?
By now, you must have realised that keeping your business productive and profitable is no small feat at all, especially when you are working on a tight budget and are relatively new in the market. Today, I’ll be sharing 3 tips that can help you reduce your operational cost and further increase your profit margin.
Outsourcing and remote-working
Choosing to outsource non-recurring jobs and hiring employees who work from home allows you to save up that extra cash that would have gone into setting up work stations and paying salaries to employees who only get to work twice or thrice a month.
Automating your Business
As the wide fire of the Internet of Things (IoT) continues to sweep across the world and affect the way business is being done globally, automating your business is no longer an optional. Using different software programs and applications, you can run your business more efficiently and cut down cost in key areas like communication, accounting, marketing, advertising, customer service, etc.
For instance, rather than keeping in touch with your remote-employees via phone calls (which by the way is quite expensive), you can communicate with all of them (in real time and at a reduced cost) via applications like Skype, Slack, Hangouts, etc.
Price comparison and bulk purchase
Don’t fall into the trap of single/sole sourcing your raw materials i.e. having a single supplier or vendor. When purchasing raw materials, it is always cheaper to buy in bulk but if you can’t make the bulk purchase, go price shopping and compare the varying price, quantity, and quality of raw materials from different vendors.
As you go about cutting cost, don’t get tempted to sacrifice the quality of your products/services or the comfort of your employees. As much as profit-making is central to your business’ growth, you may never achieve it with a bunch of unhappy customers and disgruntled employees.
Start cutting and Start gaining!
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You’d be glad you did!