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Every business, especially B2B operations with long, drawn-out sales cycles, needs to have a pretty good handle on its costs in order to improve productivity in the long run. In the early stages of your business, you’re probably not going to be able to overlook any kind of excess costs and hope to stay afloat, so now’s the time to start tightening belts in your marketing, operations, HR, and everything else that goes into making a business tick. If it’s executed properly, cutting costs will help your operation to develop and maintain a competitive advantage in your industry. Here, we’ve put together a guide to grinding down expenses at your B2B business.
Reduce Wastage
Productivity is one of the most important things which contributes to a B2B business’s success, so looking for ways you can reduce wastages is probably the best place to start. To begin with, you should be making sure that any errors in your basic operations are being identified and ironed out. Make sure that any machinery and technology in your main premises is up to date, and in pristine working condition. If anything has passed its working age, make plans to replace it. You also need to make sure that all the people in your workforce are skilled, and have all the equipment at their disposal which they need to succeed. Keeping people on the team when their skills and resources are sub-par can become a huge waste of resources after enough time. Although your capital may be looking a little thin on the ground right now, you should seriously consider outsourcing some training to a good firm, and checking out any kind of tech or tools which could make life easier for the core workers who keep everything moving. Though this will take a pretty substantial investment to begin with, your operation will end up far more cost-effective in the long run.
Market Wisely
Like any modern business, your marketing is probably going to make up a pretty substantial chunk of your overall expenses. With this in mind, you need to make sure you’re making the most wise, cost-effective decisions possible whenever you’re planning out your marketing strategies. You need to choose methods and ads which will hone in on your ideal buyer persona, and get the biggest return for your money, rather than simply copying whatever marketing ploys your close competitors are using. Whenever you’re mulling over the next marketing medium you should use, make sure you’re doing your homework. Think about how likely you are to reach your ideal buyer through this or that medium. Consider how long you can realistically afford to keep the campaign up, and how long you’ll have to keep it running in order to see some hard results. You should also be thinking about any specific mediums which would be a good auxiliary to the other. You may like the idea of seeing your business logo in the pages of a glossy industry magazine, but whenever you’re planning out your marketing, it’s essential that you choose what’s going to get results, rather than what you’d like to see. Remember that for a lot of B2B niches, the most important component in their overall marketing strategy is a detailed and professional website, explaining the specs of your product or service, and the benefits which it can offer your client companies. Here’s a pretty good example to draw from: www.reliantfinishingsystems.com/powder-coating-equipment/. Once you’ve settled on a marketing plan and implemented it, make sure you’re measuring the results from the outset. By keeping track of the ROI from your marketing, you’ll be able to make little tweaks, keep on measuring, and figure out what’s best for your specific business.
Tighten Belts in the Office
In any given B2B firm, there are usually a lot of different administrative and office expenses which can be trimmed in one way or another. Wherever you’re spending on paper documents, for instance, try to wean your office over to a mainly digital way of running things. This will help to reduce the cost of printing and storing countless documents, and will also make communications within the office a lot more fluent and efficient. Of course, this may mean spending more on digital devices and tools, but these days a more digital workplace will be more cost-effective overall. You can mitigate the cost by finding other, less essential expenses to cut down on, or through things like a BYOD policy. Before this kind of massive overhaul, you should start scanning and sending important documents rather than paying to send the document through post. Instead of buying any kind of forms or documentation from your vendor, you can also start drafting them yourself. If you’re really looking to slash costs for your whole operation, you should also try to avoid spending money on any new equipment for the office. Obviously, if you let your equipment come to a standstill on the factory floor itself, your B2B operation is going to suffer. However, if you were looking at any new furniture or equipment for the office, and your business could survive without it, it may be worth putting off these purchases, or finding some kind of compromise between the two extremes. Companies like this: www.officefurnitureoutlet.com, for example, offer a wide range of cheap, used furniture alongside their main stock. If there’s anything that you don’t need to be state-of-the-art and high-functioning, then look for vendors who will sell it to you a little on the cheap side.
Avoid Spending on Unnecessary Tools
One of the biggest costs for any B2B start-up is going to be the tools they rely on to keep everything turning over smoothly. Because large manufacturing companies and complex B2B services are so reliant on various tech tools and pieces of equipment, this is a very important area to look into when you’re trying to create a more cost-effective business. Make sure you’re only purchasing the assets that you need and can comfortably afford. Furthermore, try your best to avoid purchasing anything on credit. If there are times when your sales cycle is particularly long and taxing, then you’re certainly not going to want any big payments to creep up on you around this time. There are countless B2B firms which bite off more than they can chew in terms of tech and equipment too early on, and end up collapsing under the impact of their CEO’s frivolous spending. Don’t just buy a piece of software because it looks useful on the surface, at least without looking around for a more cost-effective solution. Before purchasing any kind of equipment or tool, research every little spec about it, and look into various case studies of businesses which have benefited from it. Use resources like these to project how much the tool or machinery will do for your business. This will point you towards the most cost-effective decisions possible, and make sure that you avoid anything frivolous.
Get Friendly with Suppliers
Think about the customers you currently service. I’m sure there are a few which you hold much more favorably than others for a range of reasons. Whatever those reasons are, I’m sure they get certain benefits from your company compared to the clients or customers who aren’t so easy to work with. By the same token, you should be taking steps to kindle the relationship between you and your suppliers with the end goal of cutting down your costs. It may be a slightly daunting prospect if you haven’t been in business for long, but asking your suppliers for discounts and deals is pretty common practice in a lot of industries. When you’re ordering a large quantity of goods, it’s especially important to ask your suppliers to knock some money off the figure on your invoice. Of course, not every supplier is going to be in the best position to offer discounts, in which case you can try asking them to extend your credit period. More often than not, industrial suppliers will be open to this kind of offer. However you go about it, make sure you’re getting a good deal from your supplier, and maintaining a strong relationship which supports those deals.
Review Employee Spending
While your staff are one of the most important assets you have at your business, it’s certainly not unheard of for business owners to make some pretty rash investments in their workforce. Obviously, you should be offering benefits and perks to the jobs in order to get the most out of the people you employ. However, too much unnecessary spending will only turn your cash flow into a mess. Training days, meals out and office parties can all be great for morale and development, but it could be holding you back from all kinds of important benchmarks you need to meet to keep your business growing. If you seem to have a big financial sinkhole somewhere in the business, and you’re not sure what it is, it may be time to review the amount you’re spending on your employees.
