nmt special report 30 NURSERY MANAGEMENT TODAY May / June 2015 www.nmt-magazine.co.uk W e all want the slick, streamlined and efficient business that maximises profits, while still delivering good value to our customers. After all, profit margins are a key indicator of success: if they’re not rising, then your business isn’t thriving, is it? But the reality for all of us is that it takes time to build a successful business, and it’s easy to get bogged down in the processes along the way. Improving your bottom line doesn’t have to mean increasing your prices. Simply being organised will help you to achieve a better profit margin, without de-valuing your brand. False economies The best way to get the most value from your money is to avoid the temptation of buying cheap. We’ve all been in a position where we’ve seen an offer which is really too good to miss; it may not be our regular brand but surely the saving makes up for any drop in quality, right? Wrong. One of the biggest mistakes you can make is to compare the price of goods but not compare, or consider, the quality. ‘Cheap’ can cost you Take heed of the saying, ‘buy cheap, buy twice’, and instead concentrate on making smarter buying choices. If you buy better, an add-on benefit will be that you will also save on time: less time spent searching for the cheapest option online; less time traipsing around the local supermarket on the hunt for the elusive bargain, as well as less time spent returning or replacing goods that are simply not fit for purpose. Factor in your additional costs such as petrol or delivery charges - not forgetting, of course, the inconvenience - and the savings made from buying ‘cheap’ are dwindling. Of course, I’m not advocating a complete embargo on shopping around – there are some genuinely good deals to be had – but by sticking with one supplier, you’ll find the benefits far outweigh the one-off bargain you might find outside of a purchasing partner. Smart buying choices Finding a supplier whom you trust will be invaluable to you as a business. A single-source supplier – or one-stop shop – will have a higher level of purchasing power than smaller companies because of the sheer number and volume of products they buy in bulk and the amount of stock they can hold. As a customer, you will benefit directly from their economies of scale through reduced pricing across your range of resources and consumables. Not only this, but you will be in a far better position to agree further discounts as well as negotiating a welcome rebate based on your overall annual spend. Two-way loyalty By using a single supplier you will The bottom line build, and benefit from, a customer- supplier relationship which is based on your purchasing decisions. For instance, if you require a product or service that falls outside of your usual remit, a good supplier will be able to recommend a suitable product or service that is perfectly matched to you as a business, saving you time wasted shopping around. What it comes down to is that it’s well worth a supplier’s while to keep a loyal customer happy. If you need something in a hurry, make your regular supplier your first point of call, because, nine times out of ten, they will go above and beyond expectations to meet your needs. If they don’t, then shop around, as there are other suppliers out there who will. And that’s the supplier you want. Once you’ve established a good working relationship, don’t be gentle on them – let them do the hard work for you to help streamline your spend. In many cases, your supplier will be able to offer cost-effective recommendations on how and where you can save money. If your supplier is asking you to move away from branded goods to an alternative product, don’t be scared to ask for a sample; you need to make certain that you will not pay the price of loss of quality - before you make your decision rather than after. Finally, you will undoubtedly benefit from reducing the complexities of your supply chain through using one efficient supplier. False economies are still very much a part of everyday business, says Chris Marston. Here he discusses how to maximise your profits without losing out on quality