Cutting waste: 5 tips to regain lost profits

Reducing business waste will be high on the agenda of a new government-led authority which has launched today.

The 2020 Productivity and Efficiency Commission has the task of encouraging business growth and boosting the economy by finding ways for businesses to better manage resources. Reducing waste is a top priority, as many businesses could make significant savings, simply by better managing waste streams.

Costly inefficiencies

The Department for Environment, Food, and Rural Affairs (DEFRA) calculates £23billion is being wasted every year through inefficient use of energy, water, and materials. And this is likely to rise as they are affected by the more extreme weather conditions brought about by climate change.

Businesses of all sizes can look to make savings by reviewing their current processes and systems.  For example, poorly designed products, system inefficiencies and over-engineering can be major contributors to wastage of energy and materials.

“We need to emerge from the global downturn with a new economic model that is designed to deal with the fast moving challenges of the 21st century,” says Chair of the commission, Laura Sandys MP.

“We cannot emerge from this downturn with an old economic model – we need to put competitiveness, productivity and resilience at the heart of our renewal.”

The commission will publish its first report in November, which will focus on how to use new processes and technologies to drive efficiency, as well as harnessing renewable resources and promoting smarter product design.

Boost your bottom line

In the meantime, there are a number of actions which companies, particularly small and start-up businesses, can take to become more efficient and help boost the bottom line.

1. Work out what you waste
   It may sound simple, but many businesses print off documents or leave computers switched on without a second thought.  If you know how much money your wasteful habits are costing, you can start to make savings.
2. Reuse, reduce, recycle
   This simple mantra should be at the forefront of business practice.  Keep this in mind and your waste will always be minimal.
3.  Take expert advice
   The Carbon Trust publishes guides and reports to help businesses become more energy-efficient and Npower has produced a helpful guide (PDF) of bite-sized advice that makes a great starting point to developing a green office environment.
4. Review your suppliers
   If you’ve been using the same suppliers for a long period of time, it may be worth surveying the market to check you are paying a competitive price for products.  You can use this knowledge to switch to a cheaper provider, or ask current suppliers to match more attractive quotes.
5. Call in a third party
   There are a wide range of cost management firms that will conduct a full review of your business spending and work out ways for you to save money.  This type of company can take their fee as a percentage of the savings you make, so it doesn’t have to cost you a penny.

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