Given the uncertainty that many businesses around the country are currently experiencing, we must look for ways to save as much money for our shops as possible, while also making sure we are maintaining and building a more profitable business in the long haul. Here are 4 powerful tips to help you save on your shop's expenses.
Tip No. 1: Review your profit and loss statement, and take a look at each and every line item. For each line item, you should ask yourself up to 3 questions: First, ask yourself if the line item is going to lead to an immediate profit. An example of this would be parts purchases or labor. If the answer to this question is no, then ask yourself if the line item will lead to a potential profit in the near future. An example of this would be your advertising or marketing investments. If the answer to this question is no again, then ask yourself if the line item will lead to any foreseeable profit at all. Examples of these items would be insurance investments, utilities, and your water cooler payment. Once you have the answers to these questions, it will be much easier to see where you can scale back or even put certain items on hold for the time being.
Tip No. 2: This tip comes from Dean Kuhn, a successful transmission shop owner and one of Elite's rock star business development coaches. He recommends taking a look at 2-3 of the most expensive items on your financial statements each month, and really taking a dive deep into every single line item that goes along with them. The following month, you should do a similar deep dive into 2-3 different expenses. This way, you eventually end up thoroughly reviewing every significant line item, nothing will slip through the cracks, and you can get a complete picture of your business's finances to help you pinpoint areas where you can save.
Tip No. 3: Always remember that your vendors are your partners, and it's important to treat them this way. I would highly recommend meeting with each of your vendors and having an honest conversation with them to make sure your partnership is as mutually beneficial as possible. During these discussions, set clear expectations for the vendor and make sure that you are meeting theirs. This will save you valuable time in the long run and will make both of your businesses more successful!
Tip No. 4: To save on what's likely one of your biggest expenses, I recommend that you sit down with your landlord or mortgage owner and have a conversation with them to see what can be done to reduce this cost. You'd be surprised how often an agreement can be made to help in situations like the one we are currently facing.
