When a company has losses, it is time to act to redirect the situation. It is important not to remain static but to be able to evolve and adapt to the times.
We may believe that there is nothing to do, but we cannot forget that an entrepreneurial character’s main qualities are resilience. Get up and get stronger from difficulties.
You probably have to face a loss situation in the company on more than one occasion. Few companies in the world have not had to face this problem. Sadly, many do not survive.
The very act of starting a business from scratch can be complicated, but as the years go by, if problems are not solved, survival can be jeopardized.
To reduce losses in a small company, we can take advantage of some of the tricks for controlling expenses in an SME that we have already mentioned. Next, we are going to develop different strategies to reduce costs.
Analyze your company’s resources
The analysis of the resources of a company is a good starting point. Thanks to it, we can first diagnose the situation.
Before establishing solutions, you have to see what the problems have been. The resource analysis methodology allows you to check the status of tangible and intangible resources and see what competitive advantages are available.
And if none are available, which can also happen in a time of crisis, analyze which one can offer the best results and which one to bet on.
Also Read: Business Sectors On The Rise To Find Work
Evaluate your suppliers
The evaluation of suppliers is, without a doubt, one of the allies when a company has losses. This methodology allows giving a score to the suppliers according to a series of objective criteria such as quality, price, or compliance with deadlines.
Thanks to this score, we will see if we have the best possible suppliers or change for others that offer us a better value for money.
On many occasions, suppliers are kept simply by subjective criteria, such as a more extended relationship or a good relationship between the salespeople of both companies, and a significant margin for improvement is allowed to pass.
The supplier evaluation allows us to approach this aspect fairly and check if there is a possibility of saving without jeopardizing our product or service quality.
Save with a central purchasing office
If you know what a purchasing center is, you will see that it is the main ally you can have when a company has losses. Opting to outsource purchases in one of these centers is the fastest way to get better prices on materials or services.
The central purchasing makes strategic purchases and gets a lower price from our suppliers. Having a greater bargaining force for assuming a greater volume of business allows them to obtain unbeatable prices for a small or medium-sized company.
The purchasing center allows the SME to fight at prices with companies of much larger size, making it a small company, not an inconvenience for obtaining low prices from suppliers.
Control your energy expenditure
Also, different tricks can be followed to lower the bill. For example, also due to a question of sustainability, air conditioning can lead to considerable savings. Leaving the temperature in winter at 20 or 21 degrees and in summer at 25 or 26 degrees allows significant savings on the bill.
Also, the change for LED lights and the game with the intensity of the morning. There should not be the same intensity in a workplace as in a passageway such as a garage or a hallway. Likewise, presence detectors usually mean a quick saving on the bill.
Finally, of course, also make the most of natural light, depending on the possibilities of the office.
Optimize your purchasing department
To manage purchasing savings, the purchasing department must function correctly. Even in the cases in which we have a central purchasing service, there will need to be at least one person in charge of managing the relationship with the prominent.
Making a purchase plan correctly, selling surpluses, or buying outside of Spain can be some tricks that help reduce losses.
Optimizing the purchasing department is also about reviewing contracts and suppliers. Make flow charts, control inventory levels or have purchase forecasts with complex variables.
Anything that helps the department function better and its communication with the rest of the company’s departments will significantly influence when a company has losses and performance needs to be improved.
Also Read: The Importance Of A Financial Plan For Growing Companies
Bet on telecommuting
In our article on the advantages and disadvantages of teleworking, we already mentioned cost savings as its main benefits.
That workers work at home means less energy, water, internet, material, etc. than if they did it at the office. Whether they do it entirely or just a few days a week, it’s a way to spend less money.
In addition, it also helps them to be much more satisfied with the company. Another of its advantages is to promote work and family conciliation.
With the tools for telework that we have, working at home is easier than ever. So now you know what is one of the successes when a company has losses, a win-win in which employees and the company win.
Reduce water consumption and get the green seal
Water-saving in the company is another aspect to consider. In this case, not only for an economic issue but also for sustainability. It will be necessary to analyze the cost of water in the company and, if it is excessive, how we can reduce it.
Use white markings
Buying private labels can save up to 40% compared to the same commercial brand product. In many cases, they even have the same manufacturer.
Buying private-label office supplies is a pretty smart option to cut costs. Above all, because it allows you to spend less without affecting quality.
Sometimes, the use of trademarks is done simply for the company’s image. In those cases, you can opt for a joint solution. Use white marks for internal use but leave trademarks in those areas where customers or suppliers come.
In this way, the excellent image is maintained, but it is also possible to save significantly in this game.
Print smart
The printing of paper in the company represents, on average, between 1% and 3% of the total cost. However, few people know that with a few little tricks, you can significantly reduce this game.
For example, different studies have shown that installing network printers instead of local printers reduces costs. Also, put a monitoring service, in which the price per copy is seen.
Printing on both sides and draft mode also allows more significant savings. Of course, we are talking about documents for internal use. You can always look for the highest quality when printing for a client.
Another unknown trick is that there are fonts that represent significant ink savings. For example, going from Times New Roman to Garamond could save 24% on ink.
Last but not least, bet on digitization. Everything that can be done digitally makes it digital. The use of shared document platforms such as Drive, in which several people can edit the same document in real-time, saves time and improves productivity.
Improve chain of command
Optimizing the chain of command is rarely a priority when it comes to reducing expenses. However, it must be borne in mind that the problems in it fully affect productivity.
One of the formulas that usually give better results is to opt for verticality. In this methodology, each person has a single direct superior on whom the orders depend. Someone who is higher or in a horizontal position concerning the superior of an employee cannot order him anything.
This makes it possible to avoid confusion and, above all, wasted time due to contradictory orders or problems in the hierarchy. Better time management will also reduce costs and achieve better results.