Cost Cutting a dreaded or a loved term?
A lot is said about the evils of cost-cutting and how it plagues organisations and individuals alike with additional stress and impossible objectives. In a nutshell cost cutting may be defined as the series of activities implemented by a company to reduce its expenses and optimise profitability. Whilst this misunderstood term is associated with a myriad of negative connotations one can argue that such measures are necessary for organisational sustainability, ensuring stability and job security.
In this article we suggest a few measures which can be implemented to reduce costs:
Track your expenses
Excel and Google Sheets are remarkable tools. Use them to track your daily expenses. This will enable you to keep control and measure your expenses in the long term across months and years. Following this tracking you will be in a better position to analyse your expenses and plan on reducing them, without impacting sales.
Ensure solid procedures are in place before engaging in any further expenses. Procedures should include expense limits and should be authorised by different personnel depending on the nature of the expense.
Get different quotes and negotiate
Make it part of your policy to get different quotes prior to engaging a service provider. You would be surprised with how prices vary for a similar service and how your business can benefit by building relationships with the right supplier at the right price!
Manage your advertising spend
Stopping advertising to save money is like stopping the clock to save time. In a world where we are bombarded by constant messaging, our business needs to be out there. That said, promotion strategies must be considered with caution, managing the related expenses so that it does not impact cash flow strength. It would make sense to consider digital channels from the offset, as these can be better controlled and managed when compared to more traditional media. This should also be strengthened by an emphasis of word of mouth marketing where employees and referrals are incentivised to speak positively about the business.
Embrace Effective Time Management
Time is money. Each minute of wasted time can be quantified into an unwelcome company expense. Investigate triggers of distraction and procrastination and aim to minimise them. Implement scalable systems to ensure that all employees are accountable for the delivery of their tasks by benchmarking timeframes. Reward employees who execute with speed.
Hire the right consultants
During different stages of your business growth, you would likely need to engage professional specialists for certain tasks and projects. Here you will need to make sure that you are hiring the right agency, at a price which benefits you. From the offset it is important to outline your objectives and desired results. Doing this right can have a number of benefits where you will utilise your consultants on a retainer basis for specific tasks, which do not necessarily require a full time employee. Apart from the cost-effectiveness, there is also the peace of mind that you are engaging specialists in that respective field.