Cut the cost of just about anything

20050201
Expenses are a headache for everyone in business. Costs keep rising, whether it's buying a ream of paper for the photocopier or a spot at the tradeshow. Some costs are fixed and just have to be accepted, but many business expenses can be reduced with a little effort and some common sense.

Whether you're buying business equipment, purchasing stationery or arranging overnight accommodation, there are ways to go about it that can save you money. Some of our favourites are:
  • Check the invoice for everything you purchase. Compare the invoice figure with your quote or the posted price and make sure you were charged the correct amount. Don't forget to add the items on a multi-item invoice and check the supplier got the total right.

  • Don't let costs accumulate. One of the problems with having an account with a supplier is the tendency to overspend because you don't have a cumulative total of what you've purchased until the end-of-month statement is received. Ask for an invoice for each purchase and keep track of how it is adding up.

  • Try negotiating. Negotiating often makes people feel "uncomfortable" but it's a perfectly legitimate tactic and you'll be surprised how easy it is to arrange a deal on anything from a business vehicle to your lease terms.

  • Shop around. It's the only way to know if you've been offered a good price. Get an idea of the going price for any item you are interested in before you make the actual purchase, and keep in touch with the cost of things you regularly buy so the supplier doesn't gradually increase prices without you noticing.

  • Take advantage of discount offers. Many suppliers offer discounts as an incentive for early payment. Even if they don't advertise it ask them if they'd agree to one if you're willing to pay earlier than their standard trading terms.

  • Make reservations on or before the deadline and confirm them ahead of time. There's usually a booking deadline for things like space at exhibitions or block accommodation. Don't miss the deadline date or you can expect to pay a penalty fee.

  • Minimise cancellation penalties. If your plans aren't firm but you need to get arrangements for travel or accommodation started, at least check the cancellation or alteration penalties so you know what to expect if you need to cancel.

  • Do things out-of-season. Just like you can shop at the end of winter, when the clearance sales are on, for your next year's winter wardrobe you can also "shop" for things like places to hold conferences or conventions. Know the in season of what you're purchasing and make a point of buying outside this time of the year.

  • Keep it simple. Whatever you're buying or arranging use a minimalist approach and avoid being sold those expensive "frills" that can so quickly bump up costs. If you're hiring furniture, go for the less showy items. If you're buying a camera get one that has the features you need but without lots of extras you'll never use.

  • Plan for re-use of things like promotional signage or corporate displays. Select materials that won't be easily damaged, and have space to store them in until the next time they're needed.

  • Don't spend to impress. Keep a tight rein on spending and look for value instead. Overspending creates the wrong impression and can make it look like you're careless with money.

  • Organise purchasing partners. If you're getting a good deal on something you regularly purchase - stationery and cleaning services for example, find another business not presently using your suppliers and see if they'd be interested in changing to yours. This gives you the opportunity to negotiate better rates for both of you because you're growing the business of your regular supplier.
The list can go on and on, but it proves you don't have to be Scrooge McDuck to get top value out of every purchase you make. Most of its just common sense and making the effort to get the best deal whenever you buy something. And of course you should always allow a bit of extra time when purchasing so you aren't rushed into spending more than you should.

Contact us

Email results@businessacademy.nz

 

Skype PhilANZ

 

Phone 04 920 0911

 

P.O. Box 30-545, Lower Hutt 5040

Click here to learn to improve the long-term profability of your business

Login Register

Sign in here for access to the latest newsletters.