A business is essentially a simple input/output system that's designed to help you bring in money and provide a service to your clients. To make this work, all you need to do is to be able to provide value for a lower cost than the price you are selling it for. So in other words if you provide food, then that's your value, and to make profit on it you need to be able to sell it for a price that's higher than the amount of money you spent making it and running the venue.
Of course though this doesn't mean you can make profit by simply jacking up the price - to do so would only drive away customers meaning that you earned a lot less overall. So what do you need to do?
The solution is simple - find ways to reduce your overheads without diminishing the value so that you can offer the most competitive prices possible and still keep more of the difference. And that means running your business in a manner that's efficient. Let's look at how you can do that...
Buy in Bulk
Whatever your business model is you are going to require materials in order to provide your products or services. In the aforementioned case of a restaurant/food store the materials will of course be the ingredients that you're using to sell your foods. For other businesses that operate in an office meanwhile you're going to need things like pens, pencils, rulers and paper. In any case by buying in bulk you can reduce your costs by getting a discount but also by reducing delivery costs and the time taken out of your working day to buy the materials.
Force multipliers are tools that can help you to get more output from the same input. For instance a hammer is a force multiplier because you can do more damage with the same energy. Likewise a computer is a force multiplier because it will help you to make more more quickly. Invest in these and you save a lot of time and energy.
Being energy efficient isn't only good for your business' reputation and conscience, it's good for your overheads too because it means you'll be able to reduce your energy bills. There are many ways you can do this from buying the most energy efficient heaters and air conditions, to buying insulated windows and walls.
Using time clocks allows you to pay your staff based on the precise hours they put in, and by using more and more efficient solutions here you can make sure that these numbers are as accurate as possible. This means the best staff get rewarded, and at the same time it means that you don't pay people for sitting around or turning up late.
Letting your staff work from home, or working remotely from the office can save transport money and more. Systems like time clocks that allow your staff to punch in at home, and things like video conferencing hardware can be very effective here and are great investments.
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Heather VonKahle works at Sme Solutions, for more information about their products and services click here
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