At certain points within the lifespan of a business, the threshold for the workload is reached. To become more profitable during these periods, a business must cut costs and improve its margins.
Cutting costs can be a challenging task, as many businesses try to keep costs low from the start. Additionally, it can be difficult to find reduced costs without compromising quality. Here are five smart ways that businesses can cut costs.
Audit Current Processes and Equipment
Everything that occurs during the average business day has a price tag attached to it. For business owners and managers to understand better ways to cut costs, it’s essential to look at things from an operational standpoint and evaluate if the price attached to something correlates to the value it adds.
Infostar, a Californian storage company, discovered that they could drastically cut costs by investing in a new shared printer rather than operating multiple small printers. They saved money in productivity, cartridge ink expenses, and what they previously spent on outsourcing flyer printing (As seen in New Color Copiers – Common Sense Business Solutions). Taking time to understand the needs of different areas of the business and using a high-level approach to bring them all together can drastically cut business costs in the long run.
Shift Your Marketing Focus
Digital marketing isn’t free, but it’s often cheaper and more effective than traditional print advertising methods. The modern consumer wants to feel heard and know that their attention and money are valued; they don’t want to feel as though they’re constantly being sold to.
Make an effort to shift the focus away from print advertising. Use modern strategies like automated email marketing sales funnel. Have key players within the business attend networking events to forge real connections. Leverage social media to connect with customers in a way that resonates and builds trust with the brand. Leave costly flyers and ads in the past where they belong.
Prioritize Time Management
The adage “time is money” has long dominated in the world of business for one simple reason: it’s entirely true. Wasted time and a lack of productivity cost business money, an ethical issue commonly referred to as “time theft.”
By training employees and providing the tools and policies they need to be productive, the business cuts cost by getting more done in a shorter period of time. Techniques like the Eisenhower decision matrix and the Pomodoro method are ways to ensure that high-value work is getting completed each day. The Pomodoro method, in particular, also helps employees remember to take a break to get up and walk around. Remember, healthy employees, are productive employees.
Eliminate Email
Eliminating email is an unorthodox method for cutting costs which falls under the broader umbrella of prioritizing time management. The average worker spends 28% of their time at work fielding emails, creating endless conversation threads where important information gets lost and people get looped in who don’t need to be included.
By eliminating email and replacing it with file sharing, a business not only prepares for a serverless future but also improves the overall company culture by encouraging employees to speak to one another. A strong company culture tends to have a lower turnover rate, cutting costs indirectly.
Innovate and Celebrate
From a larger business standpoint, it’s important to evaluate what’s costing the company money during a production process, and how it could be used in a different way. For example, a seafood company that has to pay to dispose of leftover shells could investigate selling them to fertilizer or supplement manufacturers. This not only eliminates the cost of disposal but also creates another revenue stream.
As a final measure, businesses should consider holding a contest in which employees have the opportunity to research and present a way to cut costs in return for a reward. This is a motivational team-building exercise that will resonate throughout the organization. By thinking outside the box, modernizing business practices, and empowering employees to have a voice, businesses can cut costs and improve profits.
