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‘Cutting costs’ is often a dirty term when managing a business, because sometimes it can suggest that your strategy isn’t as effective as it might have been, or it can lead to the ultimate cost-cutting necessity that no one enjoys - downsizing a firm. Additionally, you may find that cutting costs can lead certain departments to suffer from a lack of funding, which can prevent you from putting out the great work you’re known for, leading to staff exoduses and worse.
But there’s no reason as to why hacking away at your costs with a proverbial machete is necessary every day, as sometimes, cutting dead wood away with a scalpel is more important, and reasonable. This isn’t to say you should streamline your business too much, but there are practical efforts you can engage with that will help you save plenty of money over time.
In this post, we hope to discuss what those are just a little, as well as give your firm time and space to consider how this relates to your brand. Without further ado, then, please consider:
It’s important to manage your inventory correctly if you can. Not only does this retain its condition and ensure that it can be used for its original purpose, but that you track it properly and as such, know when you’re short, know when items go missing, can more readily see when a supplier delivery is lower quality than the one before, and a range of other caretaking practices that will allow you to understand and calculate your needs properly.
This might help you avoid overbuying supplies each month, or opt for substitutes that are just as good but come at a lower cost. Managing inventory properly will also allow you to improve the accountability of your firm, meaning that if items are damaged and not reported you can check who was responsible for that management, and identify what went wrong.
Selling off old assets from time to time can help you raise capital that can then be integrated as regular cash flow or be used to help you make upgrades at lesser personal cost. For instance, it might be that the last time you upgraded your ergonomic furniture within the office, you didn’t sell the old chairs, just stored them for a rainy day.
Well, it might be that putting them up for a job lot auction could help you raise the capital needed to convert the normal desks in the office to standing desks, investing in the health of your staff members. Assets may or may not be in use, and those that aren’t can always be liquidated if necessary.
Renewing your contracts each year or so will allow you to ascertain the exact coverage you get. It might be that the IT managed service you use has added a few additions to your package, and you’ve realized that actually, your humble firm barely uses them from month to month. Or, it might be that you wish to contact new insurance brokers that can net you a better deal with more inclusive packages. You’ll never know if you don’t look around and reassert your needs, keeping a good eye on the market and moving forward with care.
Decreasing staff turnover is an essential means by which to cut costs. Why is this? Well, hiring new staff can get expensive. Not only do you have to arrange contracts and do without a position filled for a time, but you have to train, onboard, and help out this professional as they acclimate to your brand. Hiring new people isn’t the worst business decisions to make, of course, but it can certainly be a temporarily inferior option when you had a qualified and experienced professional in that role for time. Investing in staff training and placements, as well as properly delegating authority will help you avoid any staff exodus, and encourage them all to stay for as long as possible.
It’s best to constantly consider your suppliers and see exactly which are providing you value and which may not be. For instance, it might be that a supplier you’ve used for five years seems to be repeatedly delivering a day or two after negotiations have been arranged, or seem to be raising their prices without much in the way of notice, or the standards may have fallen. Constantly reasserting exactly why you’re spending money for a certain service or product via a certain source can help you spot value that could be better served elsewhere.
With this advice, you’re sure to repeatedly and incrementally cut costs in the best way.
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