Getting started with cost cutting
Even if you have cut costs many times before, there are almost always opportunities to make further savings.
A good first step is to review your bank statements so as to understand what you are spending.
Utilities is an obvious target. Are you paying for services you no longer use? Can you obtain better value by combining services and/or switching provider?
Renegotiating contracts with your main suppliers should also be on the agenda. Sometimes telling a supplier that you are cutting costs will open up unexpected savings. It may also be possible to pool the purchasing of supplies with other businesses in your area so as to achieve greater efficiency and savings for all.
Training is another area where you may get better value by cooperating with other businesses.
Have you considered cutting costs by scheduling training days to coincide with staff celebrations?
Where staff turnover is high, businesses sometimes save on recruitment by investing more to retain existing team members.
On the other hand, it may be worthwhile outsourcing some activities. Payroll and HR are two areas where savings can often be achieved.
What about travel expenses? Is there scope to cut back by making more use of Skype or WhatsApp for video or call conferencing?
Technology and social media can also deliver potential savings in areas like advertising, postage, data storage, printing.
If one of your departments has negotiated special deals with hotels or transport providers, can you extend those deals to other teams in your organisation?
What about customers? Most businesses have some customers that cost more than they are worth. It’s not easy to confront this issue, but if there are savings to be achieved, it should be on your list.
Depending on your business, there may be many other opportunities. While cutting costs is not the only way to generate finance or fund growth, it is a good discipline that generally improves the profitability and long term value of a business.