Let’s face it, our economy isn’t where it needs to be and hasn’t been for a while. Most organisations, whether big or small, are feeling the pinch and now more than ever, cutting costs is at the top of everyone’s mind.
But when embarking on a cost cutting mission within your business, it’s important to understand that even though there is a general belief that a lot of small cost saving efforts add up to big savings in the long run, at Analyze we strongly advise that you tackle the big ticket items first. If you don’t, your business runs the risk of getting into serious cash flow issues way before your smaller efforts have had time to show results.
If you’re serious about cost cutting, it’s time to make some bold moves. Here’s where to start:
Take a critical look at your staffing
Now we know your first worry will be: Do I need to let people go? Not necessarily. There are other ways in which you can cut costs related to your staff setup. Offering flexi or part-time hours is a great place to start. You’d be surprised at how many people would actually prefer to work fewer or slightly different hours while still being able to achieve what they need to achieve, or in some instances even being able to get more done. Another option is to allow people to work remotely. Less staff onsite means lower electricity bills, fewer desk spaces needed and eventually even a smaller office space.
Ensure that you have the right people focusing on the right tasks
In any organisation you will find employees wasting a good % of their day on things they really shouldn’t be focusing on. This wastes both time & money. Specialised (and often costly) resources should only be focusing only on the critical tasks you need them to perform. Administration, reporting and other less critical tasks should be delegated as much as possible. Also confirm whether you really need a permanent role filled or whether you actually just need someone with a specific skill-set to help you execute on a specific task. Hiring short-term consultants to help you get the job done is in many instances the more cost-effective option.
Reduce your equipment capital
Investing in new hardware or software for your business can be a daunting experience requiring a large capital outlay. If cash flow is a concern, it’s time to get creative. Cloud hosting and open-source software are two options that can save your business substantial amounts of money. Other options would be to lease equipment rather than buying or to negotiate monthly or yearly software subscriptions instead of making that long-term investment upfront.
Do an audit of your supplier contracts
Review your current list of suppliers and divide them into two groups: Those who provide you with a great service at a competitive price and those who could offer a better deal or who could be replaced with another supplier. For group number 2, it’s time to get real. Do your market research, find out what other suppliers are offering and push deal negotiations a little bit harder come contract renewal time. If you’re not getting bang for your buck, it’s time to let go and move on.
Pay careful attention to invoicing and accounting
Interest and late payment penalties can be absolute killers and must therefore be avoided at all costs (both literally and figuratively). On the flipside, many suppliers are willing to offer discounts if you settle your bill early. If you have the cash flow, this is definitely something you should be taking advantage of. If your suppliers don’t currently offer such discounts, initiate the conversation. If you don’t ask, you don’t get.
Does your business need someone to take a long, hard look at your operating costs? Get in touch to find out how we can assist you in this process.