There’s no doubt the cost of doing business has increased significantly in the past 12 months, and coupled with the highest interest rates we’ve seen in years, as well as increased wages, it’s no surprise that businesses have been looking to cut costs where they can.
It feels somewhat contradictory then to suggest that now is the time to be making a big-ticket purchase, however businesses looking to reduce costs in the longer-term, while also increase value and service to clients, should consider exactly that.
It’s not a decision that should be taken lightly, and it goes without saying that due diligence must be done, however there is merit in considering making a significant investment in your business – whether that be in the form of extra staff, adding vehicles to your fleet, or bringing in a new piece of equipment or infrastructure.
As a business, we recently made the decision to purchase a container side-loader truck (also known as a swing lifter) to assist in moving client containers from the Port.
Despite the significant initial investment, we are confident we’ll be able to reduce our longer-term transport expenditure, which has continued to climb in recent years and not only cost the business, but our clients too.
Adding the truck to our fleet also provides an extra level of stability for our business as we’re able to have greater control over delivery schedules, reduce the risk of delays, and increase the value we can offer to clients.
Of course, for those businesses who don’t have the need for a container side-loader truck, there are other areas you could consider making an investment that could potentially reduce costs in the longer term, and may not necessarily cost tens of thousands of dollars;
- Equipment/Infrastructure: Are you currently hiring a key piece of equipment/tools/vehicle? What is that costing you long term? Depending on how often you use it, does it make greater financial sense to purchase the ‘thing’ and train a staff member to operate/use/drive it?
- External Service Providers: Are you able to bring the service in-house, whether by training a staff member, or perhaps hiring a new team member who is experienced in that area?
- Staff Training: Upskilling staff shouldn’t be overlooked. Providing training for staff in areas that assist your business can create efficiencies, reduce costs, and provide personal and professional growth for your team.
- Technology: Paying for software subscriptions – including AI – can assist in reducing costs by creating business efficiencies and freeing up staff for more important tasks.
- Energy and Building Upgrades: Utilities can be a significant cost to a business, so it’s worth considering upgrading to energy efficient appliances.
I appreciate that not all businesses will currently be in a positive cash flow position to make significant financial investments, however I still believe it’s worth crunching the numbers and seeing if it’s something you can work toward in the future.
It’s also worth considering what future costs may be imposed in your industry, whether it’s increased fees and charges, proposed levies, or even new regulations. How will these impact your business costs going forward, and is it worth making changes to find cost efficiencies?
We’re all aware of the saying that you need to spend money to make money – but it can also be true that you may need to spend a little money, to save a lot of money down the track.
