There has never been more pressure facing manufacturers in the UK. With Brexit biting and uncertainty clouding the future, manufacturers need to be tightening their belts and shoring up their finances.
Audit Your Current Setup
The first stage of reducing your business expenses and streamlining your finances is to audit your current situation, so you know exactly where you stand. The better you understand your current financial situation, the easier it will be for you to identify potential areas for improvement.
When you are conducting your audit, remember to look beyond your obvious costs and consider how inefficiencies in your workflow, for example, can impact your profitability. If your goal is to save money, then as well as reducing the amount of money that you spend, you can also take steps to ensure that the money goes further than it otherwise would. Remember, in business, time is money
Prioritise Your ROI
Reducing your expenses is great, but you are still going to need to spend money at some point. It’s therefore a good idea to devise a system that will enable you to accurately assess whether something is worth investing in or not every time. Your primary consideration when trying to spend money more efficiently should always be your anticipated ROI.
The amount of money that you spend is generally not nearly as important as the amount of money that you expect to get back. Investing more money is a much easier proposition if you expect to make back what you spend several times over. Try to get all of the decision-makers within your manufacturing business on the same page with regards to what an acceptable return on investment is, and at what point the returns do not justify the expenditure.
Get Everyone Involved
Keeping your costs low and your finances in good health is much easier when everyone in your business is involved in making it happen. If you are the only one who is adopting these new approaches, the benefits to your business are going to be limited.
It is much more effective to devise a coherent and repeatable approach to decision-making that enables all the decision-makers in your business to operate consistently and reliably. With a standardised approach to decision-making within your business, you don’t have to worry about your entire cost-saving strategy being undermined by miscommunications or misunderstandings.
If you can get into the habit of reusing and recycling anything that can be reused or recycled, you might be surprised by just how much money you can save. In fact, there are a number of advantages to going green. Not only can you potentially save yourself money, but businesses that have begun marketing themselves on the basis of their eco-friendly commitments are finding that there is real money to be made.
Even seemingly insignificant gestures, like remembering to switch the lights off when your workers leave the staff room, for example, can add up to some real savings.
Of course, when it comes to taking a more environmentally friendly approach to business, it isn’t just your bottom line that benefits. Climate change is an important issue and one that consumers are no longer ignoring. Businesses who are perceived as being hostile to the environment are going to find that they have an increasingly hard time generating good PR.
Consider Switching Suppliers
As part of that audit that we mentioned earlier, you should hopefully have taken a look at what you are currently paying your suppliers. Whether they are supplying you with essential utilities or raw materials for manufacture, you should always be striving to strike the best value deal possible.
The internet has made it pretty easy to compare prices on most things, even relatively specialised things specific to the manufacturing industry. For example, you can use an online price comparison tool like the one from Utility Bidder to compare the price of commercial utility suppliers.
The small amount of time required to research the difference in pricing can sometimes result in significant savings for your business, especially if you haven’t really evaluated what you are paying for a while.
Few industries have been as affected by automation as the manufacturing industry. However, automation is not just about replacing people with robots. It is also about ensuring that repetitive menial tasks are not taking up a disproportionate amount of your workers’ time. Automating things like your end of day processes or your accounts receivable can make a big difference to the amount of free time that you and other managers have to focus on improving your business.
Introducing automation into your back of house processes can save you money by freeing up vital members of staff for more important tasks.
Keeping costs low and reducing waste should be an ongoing concern for any business. Once you start looking for ways of streamlining your spending, you may well find it hard to stop.
James Daniels is a freelance writer, business enthusiast, a bit of a tech buff, and an overall geek. He is also an avid reader, who can while away hours reading and knowing about the latest gadgets and tech, whilst offering views and opinions on these topics.