Business owners who want to do good while also doing well know that it’s crucial to get the most out of their spending. They want their dollars to do double duty. That, in a nutshell, is the idea behind social procurement, or leveraging the power of spending to create social value alongside economic gain. In this post, we’ll explore five ways to spend your money more efficiently and make it work for you in more ways than one.
1. Make inventory and purchasing simple and efficient
Simplifying inventory storage and purchase tracking can yield considerable cost savings. The ultimate goal is to consolidate both elements into one central source. When items are stored in multiple locations, finding them becomes arduous, leading to unnecessary purchases and wasted resources.
To prevent this, move stock to designated storage areas and implement a simple ordering and tracking system. Though organizing everything will require some additional effort, the benefit of decreased expenses and increased efficiency will outweigh the costs.
2. Negotiate with suppliers
To find the best deals, it’s crucial to negotiate with your suppliers. This starts by researching them and their competitors to find the best rates and terms. Then, meet your suppliers and let them know that you’re considering switching to a competitor. Most suppliers prefer to keep good clients, so many of them are open to negotiating prices. This is particularly true when buying in bulk—don’t be afraid to ask for discounts.
3. Review expenditures and eliminate waste
Reviewing where you spend money can help you find and eliminate wasteful expenditures. Although the specifics change from business to business, generally speaking, this involves looking at labor costs, vendor pricing, utilities, and unnecessary expenses. It may take a while, but it’s important not to rush the process.
When reviewing your expenditures, look for opportunities to do some good with the money you’re spending. For example, you may be able to switch to a green web hosting provider or a fulfillment provider that uses recycled packaging. These moves may not save you money, but if they help you support a worthy cause, then your money is achieving more goals than one.
4. Pay vendors early when possible
For some vendors and suppliers, paying your invoice earlier than necessary can lead to discounts. If this is the case for your suppliers (and it never hurts to ask), aim to have cash on hand to make early payments. Over time, these early payment discounts add up, leading to sizable savings in a simple way that’s easy to track.
In addition to cost savings, this strategy of paying early results in positive interactions with vendors. As a result, they’re more likely to help or be patient during difficult times because you’ve demonstrated that you’re a reliable business partner.
5. Leverage technology to reduce costs
Leveraging the power of technology to automate common tasks and optimize regular operations can reduce costs significantly. For example, accounting software can make expense tracking and report generation simple. This, in turn, allows businesses to easily identify areas to save money. Customer relationship management (CRM) software is great for managing customer interactions, allowing businesses to deliver value and generate revenue more efficiently.
Another powerful way to manage customer interactions is through social media. These platforms can also be immensely helpful for product and service promotion. As a highly cost-effective marketing tool, they can help businesses find their target audience, engage with them directly, and grow their customer base.
Getting more out of the money your business spends is crucial to achieving long-term success. Keep the above five tips in mind to make every dollar count.
