Is Cost Reduction Important To Small Business Owners?

[huggytree]

most small business's cant buy in big enough 'bulk' to get a better price...they are typically stuck being higher priced than larger companies because of this

I charge more and have a higher profit margin than most of my large competitors....i offer the quality/service the large guys cant

i reduce my costs by working efficiently and having patterns on how i do things
i also try to reduce the parts i need to carry....i find parts that can be used for multiple purposes....i probably stock 10% less parts than most of my competition


on large projects i ask my suppliers for discounts on parts/fixtures......all i typically get is 2%....sometimes i keep it and sometimes i pass it onto the customer...depends on how squeezed i am

bottom line: small business doesnt need to compete on price(and shouldnt)----cost reduction isnt as necessary

[nealrm]

Cost is something that all successful business owner keep in mind. The bottom line is that we do compete on price, whether we wish to or not. However, competing on price is not the same as having the lowest price. We compete on price by having the lowest price for a specific set of produce, quality, availability and service.

Not everything that you mention fits well with every small business, but several do a areas of similarity. We don't have a delivery route, however we do put in 100, 200 or 300 miles a day to get the photos. Planning that route out saves us both time and money. Good planning means that instead of getting 9 appointments in a day we can get 10 or 11.