A recent survey showed a 24% rise in the cost of the average expense transaction for UK businesses, compared to pre-pandemic levels. And rising costs can have a significant impact on your cashflow and bottom line.

So, what can you do to minimise the impact of sky-rocketing costs in your business?

7 ways to reduce your expenses and boost revenue

When costs are rising and profit margins are falling, that’s bad news for the financial health of your business. But there are ways to combat this scenario.

In short, you have two main tactics to kick into gear. You can either look at cost-cutting across all your operating expenses, or you can find ways to sympathetically boost your revenue.

Strategies for cost reduction

Streamline your operations

Look for any inefficiencies and find ways to streamline your processes and reduce the underlying costs. You can also use technology to automate key functions to add efficiency and reduce your underlying costs.

Negotiate with suppliers

Revisit your existing contracts with suppliers and negotiate better terms, while also being mindful of the suppliers own cashflow pressures. Looking for alternative suppliers or finding cost efficiencies by purchasing in bulk.

Reduce your energy consumption

Putting energy-saving measures in place, like LED lighting and energy-efficient equipment, is a move towards good sustainability, but can also help you save money. Considering renewable energy options can also help.

Manage inventory effectively

Keeping your inventory lean is a good way to optimise inventory levels and minimise your holding costs. Implementing a just-in-time inventory management cuts costs while keeping you ready to service customer needs.

Strategies for increasing revenue

Expand your customer base

A broader customer base helps to bring in more sales and revenue. Explore the potential for entering new markets or customer segments, and boost ecommerce and digital marketing to sell more online.

Raise your prices strategically

Think about the demand for your products/services in the market and revise your pricing to keep it competitive. Be sure to communicate any price increases sympathetically to customers, so you don’t damage customer loyalty.

Introduce new products or services

If your current products/services are not selling, it could be time to diversify your offering to meet changing customer needs. Make the most of your existing resources and expertise to bring new products to market.

Talk to us about cost-cutting and revenue generation strategies

There’s no magic wand that can make the current economic pressures disappear. But by being proactive about your cost-reduction and revenue-generation, you can do your best to protect your business from the worst elements of increasing costs and an uncertain market.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis.