The cost of living is on the rise, and it’s impacting businesses in many ways. From rising energy bills to higher supplier costs, organisations across Europe are looking for new ways to save.
The good news is that European governments predict prices will fall by mid-to-late 2023 but, with no guarantee, a costly road lies ahead for all businesses. And with customers becoming more conscious of their spending habits, putting prices up isn’t necessarily the best move to make.
Every business is different, so there’s no single solution. But it’s important for you to take the time to sit down and evaluate where you can cut costs, to help maximise budgets and prepare for the future.
Where should you start? Here are the top four areas we see potential for cost cutting.
To us, the first stop is to make sure you’re smart with your spending. There are numerous costs you probably don’t notice day-to-day, but when it comes down to crunching the numbers, there will be room for savings.
So, our first tip is simple: make sure you have complete visibility of your financials. This way, all business outgoings can be carefully tracked, and unnecessary expenses can be identified. Getting a clear picture of your habits will help you prioritise what’s important for your business’ growth and, once you have everything laid out, you can use this to create a comprehensive roadmap to forecast upcoming expenses. Then, despite costs and purchases inevitably fluctuating, you’ll be well placed to stay on top of your outgoings.
While cutting back spending on non-essentials is the first step towards building savings, your next move should be making the most of the money you do spend.
Whether you shop around, try to negotiate a lower cost as a loyal customer, or get to know new suppliers who could offer you a one-off deal, it’s worth investing your time in looking for the best price.
We know these conversations can sometimes be a little tricky, but you might just establish a new working relationship that’ll benefit you moving forward too.
It’s true that sourcing local supplies and materials can sometimes seem costly upfront, but there tends to be hidden costs when importing too. With shipping costs set to increase and unforeseen customs charges, by the time the goods arrive, you may be paying more than expected.
When looking locally, these unexpected expenses are often eliminated, while quality remains – or in some cases is even improved. It’s important to remember this isn’t always the case when sourcing overseas, but taking the time to find the right supplier will be worth your time and effort, and can create a huge cost saving in the long run.
Big and small changes all add up, so eliminating as much waste as possible is another great way to cut costs. Think about how your business uses energy, and whether there are more economical ways of doing so. This is even more important with fuel and energy prices rapidly rising.
Start small by switching off all electrical equipment and lights when not in use or at the end of each day. Plus, switching to LED bulbs, turning down the heating, and investing in better insulation will help bring costs down too.
But it’s important to know that implementing energy saving policies in the workplace can sometimes be costly at first – especially when investing in energy-saving technologies. So, it’s important to weigh up the pros and cons to see if this is the right move for your company.
There are many changes you can make to manage and minimise your business’ costs. Whether you go all in or take one step at a time, what’s most important is that you sit back and think smartly about your spending – and weight up which costs are necessary vs those you could cut back. As costs continue to creep up, more challenges will arise, but know that we’ll be on hand to help you manage change and make the best decisions for your business.
With rising costs currently impacting Irish businesses, Vodafone is here to support with a range of offers and free services to keep your business connected.