7 Ways To Grow Your Business – Step 6

 

Reduce costs of sales/variable costs

“To achieve sustainable profits, we have to find a way to get all our costs under control” – Alan McCoy

Steps 1 to 5 looked at driving sales.

The last 2 steps in this series will look at cost control.

Costs of sales/variable costs are those costs that are incurred directly in making sales.

To use the example of a restaurant, the costs of sales would be the raw materials, the team cooking and serving the food.

Variable costs do not include overheads or fixed costs, which will be covered in Step 7.

Some ideas to reduce your variable costs could be:

• Go back to your suppliers for better pricing
• Ask suppliers for discounts for early payment or bulk ordering
• Look at wastage and re-work to improve efficiencies, reduce ordering costs and build back into better pricing
• Systemise your processes to improve efficiencies
• Carry out team training to improve efficiency

Click here for a downloadable actions and ideas list on Step 6.

Step 7 is available here.

Step 5 is available here to recap.

Get in touch if you’d like any help with reducing your cost of sales.