As trade business owners, so many of us are guilty of not knowing our numbers. What I mean by this is, we can see there’s money coming into the business, we’ve got more jobs than we can handle, but for some reason, our back pocket feels light, and we’re not sure why….
Most likely, you’ve got more cash going OUT, than coming IN, it’s time to cut your overheads. Here are three things you can do RIGHT NOW to reduce your overhead and get some much-needed cash in your back pocket!
1. Stop hoarding!
Overstocking your truck is one of the biggest mistakes trade business owners make.
If you open your work truck, is it packed to the rafters with odds and ends? For a job you did over a year ago, is there a pipe fitting still rattling around because “it might be useful someday.”
Not only is it expensive in fuel to lug around extra stock, but it’s also more likely to become damaged or lost, so you end up throwing it away and replacing it. So you’ve paid twice as much! Check out point THREE to see what to do with leftover stock!
This is a ridiculous waste of money, and all it takes is an afternoon to pull all the stock off your truck and put back only what you NEED to complete jobs and run efficiently.
2. CHECK. YOUR. SUPPLIER. INVOICES.
Even in our digital day and age, human error is still common. We’ve heard absolute horror stories of suppliers charging you for 100 items and giving you 10, all because of human error, or worse, charging you for OTHER trade businesses purchases. So many trade businesses have similar names, so its’ truly more common than you’d think! We’ve had it happen in Dr. DRiP with another DRiP company!!!
If your tradies, or yourself, aren’t religiously checking the supplier invoice against the inventory supplied, then that’s a massive mistake. It takes just five minutes while at the supplier to cross-reference!
Even if it only happens once in a blue moon, having a clear system and process for double-checking supplier costs could just save you hundreds and ensure you’re only being charged for what you receive.
3. Return it!
When you purchase stock from a supplier, it can sometimes be hard to know exactly how much stock you will use on the job.
Rather than paying for five fittings, using three, and throwing two into the back of the truck (where they will probably become lost or damaged) Return it!
Put the extra stock back in its bag, and with the receipt, return it to your supplier for cash-back or credit. Don’t hold onto one-off extras because “you might use it someday” the CASH you get back into your business account is WAY MORE VALUABLE to you.
Anywhere in your business that you can reduce your spending will only ever benefit your business at the end of the day!
So if you’ve got massive overheads, but aren’t sure how to reduce them, let’s chat! Click HERE to book a strategy session with me, Andy, and together let’s see how we can decrease your spending and increase your profit!