How do you save money at your business in a challenging economy? 💵

[isabelle]

Hey Community fam 🌟

This week, we're hoping you all can share...

How do you save money at your business in a challenging economy? 💵

We look forward to reading and learning from your replies! ❤️

[JUYBoutique20]

Great question...I can't wait to read other's responses. I've been having my vendors consolidate my orders whenever possible to lower shipping cost.  I've also noticed by setting up my own shipping accounts with the companies I use for shipping I save a little more than having the vendor direct ship.  

[Minion]

For the longest time, I only ordered enough material that would set me up for a 2 weeks worth of jobs (+/-).  I now place much larger orders of my products to save money off the cases, plus save on shipping.  Even if i were to only save $2 on something buy purchasing 4 or more, I now purchase the 4.

I  started using a product from a company down in Rochester, (6 hours away from me).  I would buy it by the 5 gallon pale and have it shipped, maybe $60 in shipping or so.  I go through enough of this product that I was now looking  to purchase a 55 gallon drum of it.  Shipping on that item to me, was $450 via freight.  Eff that right?!  11 hours, and a handful of coffees later I saved myself almost $300 by going to get it myself. 

[DinaLRosenberg]

We buy in bulk wherever possible... thankfully we have the storage to hold supplies- so we try and take advantage of bulk savings whenever we can.

Like Dan @Minion said- we also pick up a lot of our material- since we are mineral/crystal dealers- and rocks are heavy- where we can skirt shipping,. we do.

[Doran]

This is a tough one for me.  I am terrible at budgeting.  But the last 4 months have not been stellar in terms of sales or revenue. 

Last month with the help of the community I did a deep inventory count and clean-up.  Then really dug into my expenses for the year so far.  It was not fun.  But, I saw a ton of places I could cut back.  From inventory that isn't selling... I quickly popped into a basket marked SALE to do away with it all and made a note never to reorder.  Plus, some of the "extras" I spoil clients and customers with are costing me a ton.  So I looked at which ones I and my clients liked best and only kept a few.  No one has even noticed the missing ones.  

Also, I have my shop windows professionally styled each season and for fall I'm doing it myself with things I already have from the last 6 years of window displays.  This saved me a nice chunk.  

Then I looked at services in the skincare studio.  Again, I have a chunk of inventory that never really gets sold--masks and treatments.  So I offered them in a few newsletters on special.  I sold a bit but when that inventory runs out I won't reorder.  

This year I started a couple of folders in the Square savings to start holding money back for a few projects I need done plus taxes.  This has helped a ton and saved me from paying high-interest fees on loans or credit cards.  

Basically, right now, I'm cutting back on extras and things that don't really add to profits.  Plus, taking a hard look at inventory movement. 

I'm hoping to find a good business budgeting tool so if anyone knows one I'd love recommendations.  

[doc_choc]

As a manufacturer and retailer we have to keep a close eye on material costs. We invested in material resource planning software and integrate with Square. 

Before we started using MRP, there was a lot of guess work to knowing the impact of material costs changes, we had a rough idea, but rough became way too approximate in this current climate of spiralling price rises. It was difficult to keep an eye on material change costs across so many skus. Now, as soon as we have material price increase we pop it in to the system and it updates all relevant bills of materials. It was a huge suprise to find out that some of our products just did not have sufficient margin, and some were loosing us money at wholesale. We adjusted RRP, negotiated better material prices (we had better visibility of material volumes) and discontinued products we just couldn't cost in.

It took some considerable effort to set up the BOMs,  but once done it's there you are good. 

Best thing we ever did and we know our manufacturing costs are now monitored, managed and undrer controlled...as for the rest of our business 😬

[ReaverForge]

I would love to know what the MRP software is that you are using, to see if it would help with my business. 

[doc_choc]

Hi @ReaverForge

There are quite a few systems out there to choose from depending on your budget and what you are looking to achieve in particular the integrations you are looking to make  Esty  Square, Xero, Amazon and more. Take a look at link below to get you started 

https://www.softwareadvice.co.uk/directory/163/mrp-software/software

Might a project for Square to consider down the line, a simple MRP system that allows bills of materials to be generated, manage raw material inventory etc, it would feed in nicely with the Square Retail POS.

Hope this helps 

[Sweettreatstop]

We're a mobile bakery which is a little different than where you folks are coming from but maybe this is helpful.  1) One of our vendors started passing the credit card surcharge on to us - no big deal $18 - $25 per order - right?  I talked to finance & now we do ACH payment & skip the surcharge.  2) Supply chain issues:  we moved from one vendor to a "better" one but we're getting informed of out of stocks with no restock date so we re-established business with the former vendor and it has really helped. 

Best wishes to you all in the world of business!

[Christinawitt]

may I ask how you contacted finance please

[sahcolorado]

Every time I possibly can, I print on paper I have already used, but no longer need. We go through at least 10,000 pages a month and the printer paper at Walmart has almost doubled in price. I was purchasing 10 reams of paper for @$21.99 and the same box is now $39.95. We teach CPR classes, and a single class can use up to 40 pieces of paper. So, once I scan the roster and email it, I save the

stack of papers to reuse to print the next classes papers. 

We also try not to print when possible, I click print and change the printer to PDF and just save it an email it. 

[ReginaRMT]

@isabelle I really do wish I was better at saving money on costs. I have no way to lower my costs, other than ordering in large bulk purchase. ie. massage table sheets from manufacturer, lotion from source but requires rather large orders and would up costs in the long run.

[doc_choc]

Do you have contacts within other similar organisations to your own? Could you pull together to give you a bit more buying power?

[Pesso]

I love this suggestion, @doc_choc !
Is this something that you've done?

[doc_choc]

Yes, we buy raw materials several metric tonnes at a time every week and we tap off quantities for smaller 'competitor' manufacturers who are really struggling at the moment to keep going.  We charge them the same price per kilo we are charged but they benefit from our volume purchasing. They may only buy 10 - 50 kilos at a time but we need to help them, competition is good  our competitors are nice and our sector is more richer with their presence.  

[Pesso]

That is an absolutely incredible way to do things to help yourselves and other local businesses, and I love that perspective that competition only improves the whole community! Thank you so much for posting & sharing this, @doc_choc !

[karinsart]

🍉Since the Pandemic, I've started narrowing down my varieties in my inventory. Having "less" has helped my customers make quicker decisions when making purchases, rather than being whelmed with too many choices. So that means , less time=less $ spent, in creating, etc. ! Wish i'd come up with this years ago! 

[doc_choc]

We have also done the same with our product offering and it's something we will do more regularly as part of good practice. The inventory sell-through reports are fantastic for this, using the sell-through and sales velocity data. For our business some items are more seasonal, so we have to keep this in mind. But data analytics package provided by Square is key to all the above.

[lenjobakes]

Exactly this! Streamlining isn't necessarily the worst thing in the world and customers actual prefer a well curated offering!

Isn't it nice when doing less ends up being a positive?

[lenjobakes]

As a food business, we are all about being as sustainable as possible.

We pick our own fruit when in season, process it, freeze it, and vacuum pack it. Sure, we might spend 3 hours picking blueberries, but we spend $50 whereas if we went to a market to purchase it would be $150.

We also ensure we have no waste. Left over cinnamon rolls? Freeze them until we have enough to turn it into bread pudding. Left over cookies? Crumb them up and use them for the base of a cheesecake.

We never buy containers or jars because we buy whole ingredients that often come in pails or tubs and we wash those to reuse them.

Essentially, we're running like we're in war time and it works for us!

[Candlestore]

We started looking for what the cost savings are for when we buy or what the quantity discounts are.  We may spend a little more now but in the long run we save if it is something that has a track record of selling.  The other thing we have been doing is waiting to buy supplies until we need enough for free shipping.  Like when we buy our candle scents, one of our suppliers has a 400 lb minimum for free shipping, or 40 varieties of 10 lb jugs or 16-25 lb jugs. By mixing our good sellers with a new scent or two, we are able to slowly remove low selling scents and add new scents to the mix.  We are one of the few candle makers that customers can buy Fall (pumpkin) Scents or Christmas scents all year long.  We do not just make seasonal scents because people vacation here and pick up a years supply at one time.