In this series, we are sharing our advice and tips on how to make your business more profitable. Last week we shared how knowing your margins will help make your business more profitable, and this week we are talking about negotiating costs.
How to be a more profitable business - Negotiate costs.
In the UK it feels like negotiation is an unspoken and rarely used thing. However, without negotiation, you simply can't get the best bang for your money! Here are some tips to help make you feel more confident when negotiating costs, and why making this change in your process will help make your business more profitable.
- Have open and honest conversations, regularly. Having these relationship building conversations with your suppliers will mean you have a strong bond with them, enabling you to be able to have better prices and potentially better service too.
- Renegotiate with your suppliers with confidence. If you are bringing regular money to your suppliers, you have the power in your hands to make the costs better to you, whilst still bringing in money to your supplier.
- Small discounts can make a huge difference, especially on higher volumes. If you negotiate even a small discount on the costs from your suppliers, you can make dramatic changes to your profits, whilst still having a great relationship with your suppliers.
- Know your worth as a business. You need to remember how important it is to have a profitable business for your staff, your clients, and your suppliers! When you are making more profits, you are able to make their lives better, and, in turn, provide more income to those around you. When you have negotiated the costs down with your suppliers, you can more likely to trade with them, and potentially offer better prices to your customers too, so everyone wins.
- Remember it is a negotiation - it can be two-sided. Try to make the conversation a two-sided affair, and permit yourself to be open to alternate options that your supplier can provide. If they are giving similar offers to their other clients, they may have an alternative to give to you, that you had not thought of.
Good luck out there, and remember to be confident! The negotiations you make now can help your business be even more profitable and continue to run successfully for the future years to come.
