Your business – you want it to run well, work efficiently and make a profit. Who wouldn’t? After all, the reason we all work is to make money to take home and spend how we wish.
So how do you save money and maximise profit?
One way is to look at large, well-known organisations and what they do with their budget. One such organisation is the government. Everyone knows the government wastes money. From their own expenses right down to common office stationery, the government almost epitomises wasteful spending. Although government spending has come under critical review in recent times there are a few lessons small businesses can learn to help get the most out of their budgets; which are of course a great deal smaller! This includes saving on expenditures as large as printers and photocopy machines to smaller, yet still essential items like file dividers, personal organisers and address labels. If you learn how to avoid wasting money on everyday items, you can run a much more profitable business.
A top tip is to use the same supplier across all of your departments. This will save you money and help you avoid spending lots of time hunting for the best prices and deals. The government has several departments that all need the same basic supplies such as paper, file dividers, address labels, printer cartridges and personal organisers. Unfortunately, for each of these, they use different suppliers with different contracts and different prices. This attitude towards office supplies is chaotic, inefficient and a demonstration of how not to run a business. A recent report has even suggested that the cost of office supplies for one MP was well over twenty thousand pounds a year when another only spent just over a hundred pounds in the same time period – this is an incredible difference in expenditure and an example of the inefficiency of not coordinating between departments. If you run your business in this way it would cost you a great deal of money unnecessarily – and that’s not to mention all the invoices and paperwork involved.
It is not just office supplies that are dealt with in this way by the government – telecoms, IT, canteen supplies, gas and electricity are all supplied by different people for each department. If they were to consolidate these suppliers, it would reduce their outgoings and bring their expenditure down – which is what every business should be aiming to do. With computer systems, things like upgrades would also be much easier to handle if all departments were running the same set up with the same supplier.
Another top tip is to buy in bulk. Many large companies try to save money on their office supplies by buying from wholesalers or direct from the manufacturer. Items can cost much more at consumer prices because by going direct, you cut out the profit which the store or ‘middle man’ has added on top of the original price. This is again something which the government seems to ignore.
It is also wise to shop around before you find that one important supplier. If we are in a store, we very rarely pick up and buy the first item we see – we consider quality and price first. This is another example of where the government waste money – they actually pay up to £1.31 for the same unit of paper that on the market can cost as little as 26 pence. They evidently do not shop around to get the best price. Suppliers are aware that a lot of businesses operate this way, and they are likely to overcharge as a result.
There is no reason why the government cannot run cost-efficiently – it is thought that they could save billions of pounds a year if they just spent a little time thinking about what they are spending. People within the organisation have no motivation to save money – if they need something, they will get it. They are not challenged to spend under a budget and even have the ability to spend up to a thousand pounds without it needing to be authorised or monitored. It is, therefore, a good idea to make every person within your business accountable for outgoing spend – shop around as there are some great low-cost suppliers in the market especially for office supplies.
Following these best practices and treating your business expenditure as ‘your own money’ not your ‘play money’ will help your business to save money from day one, and on into the future.