Now, this might seem like something that is easier said than done, but there are items on your balance sheet and cash flow forecast that can be reduced and tightened to increase your bottom line ultimately.
Running a business, big or small, means we are continually facing increasing expenses, expenses such as materials, rent and utilities, distributions costs and more. Controlling these elements and keeping a tight rein on your expenses is vital.
In this post, we’re looking at a handful of business costs which you could look to reduce, to help you increase your profit margins.
Renting, leasing or buying your own office space is not something to jump into lightly. Your office space can be the most significant monthly outgoing you have, so making sure you have secured the best deal for you is essential.
It’s important to consider things such as taking advantage of depressed prices in less expensive quarters or negotiating with your landlord for better lease terms.
Or if you don’t need a lot of space just yet, why not consider working from home or even mobile?
Many larger companies now also offer shared workspaces for a much smaller fee and more of an opportunity to collaborate with like-minded individuals, allowing you to save on insurances, business taxes, and utilities.
For many of us it feels like there aren’t enough hours in the day to start with, let alone how to cut them down, but this point is all about prioritising and focusing activities on what needs to happen vs. what would be “nice” to happen. It’s about setting goals and thinking smarter. Things like driving across town to pick up materials, when the same store offers free next day delivery?!
Tracking our time better and finding more streamlined ways to operate helps us not only with our work day and workloads, but it also helps to reduce our stress levels and get us focussed!
Marketing and advertising can quite often be a big chunk of your expenses. But it doesn’t always have to be. Knowing your target audience as well as using social media to its full extent is one of the best advertising opportunities you can harness.
You don’t have to have the big advertising budgets that were necessary to build your name and brand in the past, but you do need to know who your audience is and just where their conversations are taking place, and in some cases let the hashtag do the talking!
Working in the fashion industry is expensive full stop. Materials and production costs can be extremely expensive. To increase your bottom line and rather than just breaking even on a garment or charging more than your customers are willing to pay just to make a profit, it’s worth speaking with your suppliers and bartering for the best deals around, building up relationships as well as connections for all your goods and service needs.
The two things that every business is responsible for – making knowing your taxes and insurances essential when it comes to knowing your accounts inside and out (check out our small business taxes you should know about).
When it comes to insurances, make sure you carry out an annual review of all your insurances to ensure you’re still getting the best deal around.
You can also look to increase your excess to reduce your premium – however, you need to make sure that your excess isn’t too high so that if you did need to make a claim, it would be unaffordable for your business.
When it comes to tax, you need to keep a full record of all your deductions for the tax year, making sure all business expenses are accounted for and entered as deductions on your tax return – save receipts, record mileage, etc.
Not everything on your balance sheet and cash flow forecast are covered here, what we want to highlight is that we need to take the time to look at our accounts much more closely than we possibly do. It’s not just a case of filing receipts and putting the figures in. To be successful in business we must be accountable for everything and what we spend, and our overall costs are a big part of this. Looking to build relationships with suppliers, and good relations at that, making sure you’re maximising your marketing spend while focusing on your target audience are all steps, we can take to reduce costs.
As a fashion professional looking to grow a successful business and increase your overall profits, looking at your costs, from materials to office space and more, is the first step in the right direction.
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