Cut Costs in 5 Steps

Just the act of flipping the ‘Open’ sign means costs are accruing. Can you hear the pennies slip away? Oh yes, running a business is expensive, and controlling costs should be a constant priority. But please don’t make an immediate switch to cheap toilet paper and revoke all bonuses. Simply start paying very close attention to where the dollars go, and use your wisdom to make smarter decisions about what’s necessary (leave the marketing alone!) and what’s wasteful.

·        Track and budget: Analyze your short-term, long-term and fixed costs, and devise a plan for the best way to make your money work for you, while still paying the bills.

·        Maximize efficiency: Review processes and procedures to see if waste is affecting your bottom line. And while you’re at it, set simple polices to ensure work gets completed, orders filled, and so on; and build in ways to make employees accountable.

·        Utilize technology: Are there areas of the business that could benefit from an enhanced efficiency solution, such as customer relationship management (CRM) software? Consider a short-term investment for long-term savings.

·        Find hidden costs and simple savings: Review contracts annually—and dig into what you’re actually using and if changes could be made—and keep them short term. Also, uncover the little things (like printing, heating and cooling) that equal savings if controlled.

·        Outsource and change pay structures: Evaluate contractors or freelancers for specific projects versus hiring full-time, and check into commission-based pay for the appropriate circumstances and employees.

Remember, a sustained approach will serve you better over the long haul than the immediate benefit from a slash-fest.

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