Alternative solutions – sales versus cost saving.

In 2017 Loop CR, a computer recycling company, approached Business Doctors to obtain some help. The immediate issued raised was that the marketing was going to suffer because the general office assistant who managed the office, and the social media, had recently emigrated.

Peter Searle of Business Doctors, Maidstone, undertook a full review of the business. He was told that the business had under gone some significant changes in the last 3 years. As is often the case, the issues which faced the owner currently could be solved in different ways.

Three years earlier, three warehouses from previous businesses had been amalgamated into one. When the new business had been formed and the owner moved to the current premises, the warehouse had been rammed full. Stock levels had reduced over three years as the stock reduced.

Business Doctors recommended implementing the break clause in the warehouse rent so the overheads could be significantly reduced. There was no need for such a large building now. The building rental overhead could then be set at a level which could be supported by the current level of business activity. Fortunately, notice on the building could be given almost immediately. The resulting saving brought the business back into financial balance. Input and output were equalised at a much lower stock level and the search for a suitable facility which was within the budgeted overhead begun.

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