The world is full of ideas on how to reduce business costs, although many of these are based on theory rather than the harsh practicalities of commercial management. After all, it doesn’t make sense to reduce costs if it is detrimental to profitability, as this will have a debilitating effect even in a growing economy. With that in mind, all costs must be measured in line with their potential return, before any decision is made on where to make reductions.
So what are the most practical methods of reducing business costs? Consider the following ideas:
- Reduce Postal Costs
While this may seem unusual in an age of digital and remote communication, it is still necessary to use postal services and stationery suppliers such as All Colour Envelopes. These services and products come at a cost, so it is necessary to monitor these and drives price points down where possible. Bulk-buying stationery provides an excellent starting point, while it may also be worth partnering with delivery firms that will offer a discount for regular contracts. These may represent small savings, but they can quickly accumulate over the financial year.
- Cut all Non-strategic Costs
Before making cuts, it is necessary to make the division between strategic and non-strategic costs. This is an important distinction, as while the former relate to disciplines that have a direct impact on profitability the latter do not so. This means that non-strategic costs should be considered as your primary targets for cuts, as these can be reduced without diminishing your prospects for future growth. In contrast, strategic costs such as marketing should be given a clear priority as successful campaigns can generate significant revenue for your firm.
- Consider Outsourcing Work and Employing Temporary Staff Members
We live in the age of the freelancer, where individuals are empowered to work for themselves. This creates significant opportunity for cost conscious business owners, as they can select temporary employers from a global pool and contract them on a short-term basis. This creates a flexible, motivated and cost-effective workforce, which is hired to undertake specific tasks within a predetermined period of time. So rather than invest heavily in long-term staff members whose workload fluctuates throughout the year, you can drive a more efficient and profitable venture through hiring freelance employees.
