8 Ways To Reduce Costs In Business
The general aim in business is to control costs, maximise turnover and boost profit. As such, companies are constantly on the look-out for ways to reduce overheads and avoid wastage. However, it’s important to do so in a way that doesn’t compromise the quality of your product or service, or upset your staff – or customers!
Whether it’s a matter of implementing a quick, simple change, or something that takes a little more thought and a greater investment, there are a number of ways businesses can streamline their operations and save money in the process. Here are our top eight.
While outsourcing doesn’t always work out cheaper than undertaking a task in-house, with certain aspects it can be the more economical option.
One example is telephone answering. If your business doesn’t receive a constant stream of inbound calls, but the ones you do receive need immediate attention, it could make more sense to outsource this to a contact centre than employ a full-time receptionist. The same is true of IT or design, for example – if the requirement isn’t consistent, rather than pay the salaries of an in-house tech team who’ll be twiddling their thumbs when the work isn’t there, it’s worth considering hiring freelancers or agencies from time to time for one-off jobs.
- Go paperless
Technology is there to help us – in life and in business – yet too many companies are still living in the dark ages and carrying out vertiginous amounts of paperwork, and paying for the associated man-hours needed to process it. Consider investing in software that cuts out such manual admin work and takes things online – while the initial investment may seem like a burden on your bank balance, it’ll be worth it in the long run. It also offers the very practical advantage of eliminating the need for bulky filing cabinets, which take up precious square feet!
Shifting your accountancy management to the cloud is also quicker and more efficient. You can pay invoices in a second using scanning technology – again, reducing paperwork – and it’s particularly useful if you’re having to scale up. Plus, it boosts your ‘green’ credentials!
- Give staff more control
It’s long been a complaint of HR departments that managing staff members’ annual leave allowance and shift rotas eats into the time they’d rather be spending on implementing performance-boosting strategies. Their employers would naturally also rather see HR wages being put towards this. With this in mind, it could be worth looking at devolving such powers to staff, giving them control over their holiday requests and which hours they work with the help of specialist software and staff portals.
- Offer flexible working
If the nature of your business lends itself to it, allowing certain employees to work from home could dramatically reduce the space you need to rent to house your workforce. More and more businesses are embracing the changing definition of the workplace for a number of reasons, but chief of these is cost-effectiveness.
- Be more energy efficient
Businesses plough substantial amounts of money into the little but important things like keeping their buildings warm and cars on the road, and there’s copious opportunity to cut costs in this domain. Whether it’s rolling out the use of hybrid cars, opting for more energy-efficient equipment, or even something as simple as implementing policies on energy restriction – such as turning lights and machinery off when not in use – you’re certain to see an improvement to your monthly bills.
- Negotiate with suppliers
This may sound like an obvious one, but many businesses are reluctant to haggle with their suppliers and it could be costing them thousands. Don’t forget: suppliers are used to it, especially in this economy, and would rather compromise a little on cost than lose a regular customer. Try seeing what one of their competitors can offer: if it’s cheaper, ask them to match or beat it; if they can’t, it may be time to think about switching.
- Seek out contra deals
If another company offers a service that you could benefit from, and you offer one that they could equally make use of, it may be worth approaching them with the offer of working on a contra-deal basis to reduce outgoings. Delivering a service in lieu of payment can often work out cheaper overall.
- Alter your marketing strategy
When analysing your outgoings, stringently vet your outbound marketing costs and see what you could substitute for cheaper yet equally effective alternatives. If you’re not seeing a return on advertising budgets or involvement in big trade shows, perhaps it’s worth looking at other options. This could be clever email marketing campaigns, targeted social media activity, or inbound marketing approaches like improving your website, for example.