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The Art of Cutting Costs

Bonji Foods Aficionado Smart Brief: Volume 37


Hi all, welcome back to the Bonji Food Aficionado Smart Brief! We hope the weekend treated you well and you are ready for a new week full of new opportunities! Restaurants and food brands often struggle with cash flow. It can be difficult to balance growing your business with keeping costs to a minimum. As Bonji Foods has grown, we've had to re-assess constantly to see where we may be able to cut down on some costs. Thus, we are writing today with some key insights and tips coming from people who have done it themselves!


What to Do When You Have To Cut Costs When the time comes, as it always does, your business will need to find ways to cut costs. Whether you are a manager or owner, opening up cash flow for more important tasks is a must when you start to think about expanding or in some cases, staying afloat. Before we dive too deep into some tips and ways to cut costs, there are two things The Harvard Business Review says to keep in mind. 1) Don't try to find that one magic idea that will solve all of your problems. Radical change requires massive risk and usually, that isn't something you are in the position to take on as an organization. Even if you are capable of taking large amounts of risk, the chances of a single idea reshaping your cost structure are unlikely. 2) “The degree of organizational disruption caused by your reductions will usually be proportional to the degree of cutting you do.” In other words, if you don't want to risk interfering in multiple sections of your business, you should keep cuts to a minimum. The more you end up cutting, the more disruption you'll see within your business.


"Incremental ideas with minimal impact on other departments can allow you to trim up to 10% of costs. Redesign or reorganization ideas often eliminate the lowest-value activities, with moderate impact on other departments, and can help cut expenses by up to 20%. Cross-department and program elimination ideas are usually necessary when you’re aiming for 30% or more, but they have the greatest potential to be organizationally disruptive."


To us, cutting costs is an art. Something that very few can accomplish successfully and even less can master completely. In our eyes, there is nobody better at cutting costs than Arizona and Walmart. Starting with Arizona, they have maintained its 99 cents price point since the 1990s and founder Don Vultaggio doesn't see it ever changing. How have they been able to do this? Other than the passion of Vultaggio, Arizona has never paid for large advertising placements, streamlining production, and maximizing efficiency. Not only does Arizona use half the amount of recycled aluminum as other companies, but they have also doubled its packaging speed since the 90s. As for Walmart, Sam Walton, owner, and founder has always made huge efforts to keep operations costs low. Whether it be a simple store design, direct sourcing of goods, or automating supply-chain systems, Walmart has been the king of low prices since the 1960s. Now, here are a few tips or easy ways to cut some costs out of your business: 1) Consider Your Office Supplies Here at Bonji, we have been finding a ton of small “office” type of items that we can find cheaper or simply don't need as much. For example, our labels went from costing 50 cents per label down to 18 cents per label. You would think that quality would go down as well, but in fact, cost went down and the quality actually increased! Be sure to check out all of your available options, you never know where you'll find a deal. 2) Changing or Simplifying a Process A bit of a step up from tip number one, however, it is important to constantly be reviewing processes that you've put in place. Everything your business does should fall in line with some form of process. Thus, certain processes can eventually go out of date or simply need some revitalization. We often fall in love with systems that we design, but like most other things, they need to be updated or changed from time to time. 3) Avoid Credit Card Processing Fees Something we've noticed is the high credit card processing fees that have only gone up over the past few years. Not only does this hurt your bottom line, but it may lead you to raise prices for customers. Maybe even go on the search for cheaper service providers because they are out there! Of course, we are moving into a digital world so this may be difficult. However, whenever you can, try to avoid those credit card fees.

Cutting Costs - Bonji Foods Acai Wholesale

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