Cutting costs in your business are something that has to happen at some point or another. It is inevitable. Cutting costs is not a sign of failure or contraction of your market. It is just a business reality. It happens in cycles. Sometimes you expand, sometimes you will cut.
But do you know really what to cut? Where can savings be made? There are many areas. To preserve the business function, it’s ideal to take little bits from each sector.
Sometimes only one solution will work though. It’s up to you to know which.
Let’s take a look at some of the best ways to cut your costs.
You would be surprised how much money is lost here. Efficiency is a very broad term in this context. It could mean how much you are paying for office supplies for example.
The solutions are as broad as the problem though. Finding efficiency savings could be as simple as how much you are paying for stationary.
The solution may lie with changing supplier. It could also be that you need to cut down on the wasteful processes. Maybe print double sided for instance or ensure few mistakes are made in the process of stationary being used.
Efficiency could also refer to productivity. Productivity is determined by how much work is done by the overall workforce. If you employ ten thousand people, but some are working to a higher level than others, which needs to be looked into.
Redundancy and Replacements
Moving neatly into this category, you cannot be afraid to have to cut the workforce if you have to. If you can maintain a level of productivity with a reduced and more efficient workforce, you’ll have made a good saving.
An option for this saving would be to reinvest into the workforce. Not to specifically grow it, but to instead get a higher quality workforce. Find more people with the qualities your best workers have.
This is when it is too expensive to maintain a team in-house to do the work. If you were to want digital marketing to guide your web presence, then a business like payonperformance.com.au would be where you would look to outsource.
A number of utility jobs within a business are outsourced. They may be covered by the owner of the building if you do not own it yourself.
It would not make sense to employ cleaning staff full time, for example. Hiring an agency to provide cleaning staff would be more efficient instead.
Cutting At The Top
If the business needs a cash injection and there is nowhere to cut, you have to look to yourself for the money. Taking money from the top is only an option if you are making more than a liveable salary. Don’t sacrifice yourself for the business.
If you are in a position to help, do so. It’s your business after all. Do you want it to continue to succeed, or do you want to keep your big pay cheques until the business goes under?