by Nigel Hilton
Money is the lifeblood of your business, and on a fundamental level; this means if you haven't got more coming in than going out, you have a big problem. Of course, there are lots of ways that you can increase profits, but the simplest one by far is to reduce the amount you are paying out because it means less need to come out of your revenue. Happily, this is something you can get some practical advice on how to do in the post below. All while still maintaining the quality that your business has become known for.
A straightforward way to cut business costs is to reduce the overheads you have to pay, including electricity, gas, water and the Internet, as well as business rent, and insurances. Of course, one way to go about this is to look for the best possible deal on all of these things.
However, a much more effective tactic and one that is now wholly viable is to abolish the need for these things altogether and switch to a remote working model. In fact, by doing this, you won't need to worry about any of these costs as you will have no central premises to heat, light, or run.
It is wise to note, however, that for your business to work effectively when using a remote model, you will need to ensure that the system of communication you use is flexible enough to accommodate this. Something that may cost you initially, but in the longer term will ensure the quality of the work you produce remains high, while still saving money overall.
Do you know what costs money? People, that what, and in particular experts. In fact, the more expertise, experience, and education a person has in a specific field, the more you can expect to pay them.
Of course, this can become particularly problematic when you have a project that needs completing for your business to operate, but there isn't enough work to employ such an expert for an entire year.
Luckily, there are some solutions that you can use to get around this. The first is to employ consultants that can come in an advise your employees on how to do things. Something that means you get an expert eye to oversee the setting up of a process.
Another possibility is to outsource the task you need to be completed to a specialist organization. Something that can work well not only for one-off projects but for when tasks need to be continuously overseen and managed by experts as well. With IT managed services being an excellent example of this. The reason being that they can provide your business with access to an expert without having to account for them on your payroll, keeping the quality and productivity of your business high, while still saving you money.
Automation is also another smart way of cutting costs in your business, rather than corners. This is because by automating a task either physically or virtually, you can maintain the consistency and quality, but also significantly reduce the person-power needed.
Of course, fewer people to pay means less expenditure and that means automation is a valuable cost-cutting tactic that all businesses should consider.
However, it is worth remembering that while technology is evolving all of the time before you put all of your eggs in the automation basket, you need to check what is possible and viable in your industry. After all, just because Amazon are using robots in their warehouses and for deliveries in some cities, it doesn't mean that every task and role can be automated successfully.
Productivity is also something that can help to slash cost while maintaining quality. After all, if time is money, the less of it you need to complete a task, the less it will cost you to do so.
Of course, boosting productivity can be complicated, depending on the type of business you are running. The easiest industry by far to improve productivity in is manufacturing because rationalization of time and resources already underlies everything they do. What with production lines and heavy machinery designed to make everything more efficient.
You may, however, struggle to implement productivity improvements in situations that have less automation and more human input such as stores, restaurants, and offices. This doesn't mean it can be done. However, it usually just takes some time to both examine the way things are conducted and to make lasting changes in these that reduce the amount of time and effort that is needed.
In fact, there are a few issues that always seem to cause a problem for productivity no matter where they occur, namely meetings and emails. To that end, it can be very helpful (unless it's a vital element of your worker's role to monitor incoming email, they be batched into a single session in the morning and afternoon.
Additionally, if you find your employees attending meetings about having meetings, it may be time for a shakeup there as well. In particular, a short standing briefing can work wonders for productivity, as can setting meetings at times like Friday just before clocking off, as no one will want to stay late then, and the will suddenly and organically become shorter and more productive. Something that will ensure the quality of what your business does remains high, but that your costs will stay as low as possible.
Negotiate (on everything)
Finally, sometimes in a non-work setting, we can get used to just paying the sticker price for the item we want. However, this is a lousy way to do business. In fact, what you need to remember here is that everything is negotiable from the lease you pay on your building to the resources you buy-in regularly, to the salaries you award your top employees.
Making sure both parties are happy in negotiations can help your business save money in the long term.
Of course, for this to be a successful tactic, you will need to get good at the art of negotiation, something many people often see as just getting what they want.
However, those will real negotiating skill know that it's much better to come to a resolution that makes both parties feel as if they have won. Something that will then open up the possibility of repeat negotiations when the next time comes around, and so will enable you to save on costs over the long term as a business while still keeping quality high.