5 Ways Cannabis Companies Can Increase Efficiency and Reduce OPEX (Operating Expenses)
Indeed, the cannabis industry makes for a lucrative career choice, but the high overhead costs are very much a reality in this business. However, with adequate understanding, knowledge, and corrective measures, cannabis companies can reduce their OPEX (operating costs) and increase productivity in the long run.
Companies functioning in the cannabis industry must know how to maximize their revenue, efficiently organize their labor, reduce operating expenses, and adhere to government regulations.
If you’re seeking ways to achieve that, you, my friend, have come to the right place. Read on to learn about 5 ways cannabis companies can increase efficiency and reduce OPEX.
5 Ways Cannabis Companies Can Increase Efficiency and Reduce OPEX
Tip #1: Track OPEX To Trim the Unnecessary
To reduce OPEX, cannabis producers must keep a close eye on their operating overheads. For this purpose, the company can create a detailed account for their operating expenses and analyze which expenses out of all can be trimmed or eliminated. You’ll be surprised to see how much difference the elimination or lowering of unnecessary operating expenses can have on your profits.
Tip #2: Use Technology to Track & Reduce OPEX
Technological advancements have drastically transformed how businesses engage with their operating expenses. Cannabis producers can similarly use technology to track, assess, and reduce their OPEX. For example, they can utilize a point of sale (POS) program to:
– Eliminate slow-moving inventory
– Anticipate inventory stockouts ahead of time
– Invest if high-yielding products
Apart from reducing OPEX, the POS data can also allow employees to make better suggestions and organize product placements more effectively and intelligently.
Tip #3: Develop a Standard Operating Procedure Manual
Labor expense accounts for nearly half of production and operational cost in a commercial cannabis business. This is one reason why cannabis producers are looking at their bottom line and strategizing how to reduce OPEX and increase efficiency.
A simple way to do that is to create standard operating procedures that will help you control costs while maintaining efficiency. To achieve significant results, ensure that everyone follows it through consistent checks and balances.
Tip #4: Develop Employee Training Program and Provide Ongoing Support
It’s a proven fact that the cannabis industry holds a higher employee turnover rate than other industries. The reason for this is that cannabis producers have been so busy in satisfying external requirements that they often forget about the importance of employee training and support.
The workforce of any company determines the heights and success it’s going to achieve, and neglecting such a critical component is not only going to affect efficiency negatively but would also increase OPEX. Thus, if you are looking for ways to increase efficiency and reduce costs, we suggest you invest in targeted employee training with ongoing support.
Tip #5: Outsource or Automate If Possible
Generally, it’s suggested that activities that don’t represent the company’s ‘core business’ can be outsourced, such as security, packaging, cleanliness and hygiene, meals, etc. The scale on which external suppliers perform these activities represents an excellent opportunity to reduce OPEX for all kinds of businesses, including cannabis.
Automating these processes on the other hand, specifically the printing and packaging, can lead to a huge boost in revenue with very little increase in overheads. For instance, bringing digital label printing in-house, along with an automated labeling equipment, can cut substantial amounts of lead times and overheads out of your budget. It will also lead to faster turnaround times and the ability to have full creative control over your products.
No more wasted packaging or delays getting your product out when you are in full control of the process!
So, if you want to reduce OPEX and increase efficiency, click here for high-quality cannabis packaging equipment at the best rates!
It’s essential for any business’s long-term success that the management keeps a cautious, consistent look on its OPEX and search for ways to increase efficiency and reduce operating costs.
The above five ways cannabis companies can increase efficiency and reduce OPEX are full-proof and effective tactics to make your cannabis business reach new heights!