Too often when business owners want to make more profit they think ‘I need to grow my sales’. While that’s true to a point, one of the easiest places you can increase your profitability is to take a look at your expenses.
The best thing about reducing expenses is that those savings go straight to your bottom line
Here are three key things to do that are going to help you reduce your expenses:
1) Review your expenses.
When was the last time you sat down and reviewed the expenses in your business? You’ll be amazed at how expenses can just creep and add up. Many things you spent money on in the past may not make sense to spend now.
If you haven’t done this for the last six to twelve months, then sit down, print out a profit and loss report and just have look at where your money is going. One of our Biznostics customers did this recently during one of their missions and was able to save just over $400 a month by looking at the expenses in the business.
2) Negotiate your expenses.
Next as you review your expenses, identify which of your suppliers you might be able to ask for a better deal from. If it has been a while since you have done this then chances are your buying patterns may have changed. You may be doing more volume and so have more buying power. Sometimes you can change your buying habits and get a better deal. Like one of our fencing contractor customers… They were able to negotiate a better deal with his supplier by ordering a number of jobs at the same time which added thousands of dollars to his profit just by changing his habits.
3) Proactively manage your expenses.
Often expenses are incurred due to poor planning and poor management. Like a landscaping customer of ours who often would forget things on site for the job they were doing. They’d have to pop down to the local hardware store and buy the items they needed. There was a time cost to this because someone was off site to pick up the materials. Plus it was costing them money as they were spending retail prices to buy what they needed.
Proactively managing your expenses can make a big difference in improving the profitability of your business.
When you work on these three things on the expense side of the equation, you’ll make more profit.
And best of all it can usually happen quickly and the investment in time now will pay you for months to come.
P.S. Whenever you are ready here are 3 ways we can help you build and grow your business:
1) Join the Construction Business Owners Network
It’s our free Facebook Community for business owners in the construction industry where you can learn ways to make your business more efficient, more profitable and more enjoyable to work at. Click here to join
2) Watch the ‘From Business Slavery to Freedom’ Video Training
Watch this 20 minute crash course on how to take control of your time so you are more efficient, less stressed and have more freedom. Click here now to watch
3) Join our Business Freedom Program
If you’d like to work with us directly to create a business that makes the money you want and gives you choice of how much you work… email us here with the word ‘Freedom’ in the subject line and we’ll get you all the details.