2020 has been a tough year for businesses across almost every industry. Profitability targets have had to shift and we have seen objectives and goals realigned across the economy. Working from home has created new challenges and bringing staff back into the office even more. Now, as we start to look towards 2021, the goal for most organisations is to get back on track. So, how can you start to prepare for that by optimising costs and improving profitability?
More cash coming in creates flexibility and this is what so many enterprises desperately need right now. Flexibility can provide the opportunity for growth, which has been considerably lacking for much of this year. Depending on your industry there may be many different ways to improve profitability, from investing in new product lines to looking for opportunities to shift business models in the current climate. Service is probably one of the most effective ways to start improving profitability over the long term and one that requires little up front investment. Customer service proves time and time again to be one of the most important factors for consumers when it comes to brand loyalty. Whether you improve response times to customer queries, personalise your customer service or provide more ways for people to get in touch, you could start to see the benefits almost straight away.
The other half of the picture when it comes to improving financial position is optimising costs. When looking to improve profitability, optimising and reducing your business costs is an ideal solution as it allows you to improve your profit and financial position without increasing the prices that your customers or clients have to pay.
Cost control has been tough this year as the priority has frequently been to simply cope with the wave of change that has swept over the economy in response to the COVID-19 pandemic. It has been essential to respond to government guidance, adapt to the challenges of reaching consumers and ensure business continuity. However, now with 2021 on the horizon, it’s time to start thinking once again about how costs can be optimised within the business to help make space for greater profitability next year. This will be different for every organisation but could be driven by:
- Cost cutting. For example, identifying processes, products, spend or resources that are surplus to requirements. This may particularly be the case if your enterprise has been forced to shift to a new business model during the pandemic and plans to continue this into the following year. For example, if you have had to reduce the number of people working from in your workplace or office, there are a range of costs which can be optimised to reflect this. For more information, give our team a call on 020 8899 1100.
- Cost consolidation. For example, if you have different suppliers for each of your business services or supplies, consolidating suppliers so that spend is with one single supplier can present great opportunities for cost savings. There are many benefits to doing this, including consistent pricing, the opportunity to make savings by using a single supplier and being able to better control costs and manage your account. While the shift from multiple suppliers to a single source can seem intimidating, in the long-term this provides the opportunity for a much more streamlined approach and potential reduction in spend.
Prepare for success in 2021
2021 is as yet an unknown but with the right preparation could prove to be a much more successful year for many when it comes to cost optimisation and improving profitability.
MBM Omega help our clients to save time and money by providing a single source for all their business supplies and services. To find out more about how we can help your business reduce costs to improve profitability to enhance your business positioning, get in touch today by calling 020 8899 1100 or contacting firstname.lastname@example.org.