Week 2: Money Saver Step 2 – What’s the plan?
Last week we looked at where your money is being spent. This week, we focus on how you can use this information to pull together a plan to save money.
So you’ve analysed your costs and find out that as a practice you spend £30k on consumables, including things like toilet rolls, stationery, printer cartridges and vaccutainers. At this point you need to ask yourself, what’s my goal? Do you want to save time as well as money? If you need to save time, think about what you need a supplier to do to support you. Put a figure on the amount of money you want to save so that you know what you’re aiming for.
Your best chance of reducing costs is to gain better leverage over your suppliers which can be done by increasing your spend. You can increase your spend by:
a) increasing the number of categories you buy from that supplier
b) committing to a spend threshold each year (suppliers love commitment, but this increases the risk to your practice, what happens if you don’t hit that level?)
c) getting other GP practices to spend money with that supplier, looking at regional buying groups (more cooks, means delays in the process though)
The final way you can raise leverage is the threat of moving business away. But never threat unless you can see it through as it will just undermine your negotiation. We’ll be taking a look next week at how you can use your intended strategy to find the right supplier for you to invite to quote.
