I just read an article that described how a newly appointed vice president-director of Indonesia’s largest non-state bank noticed that staff were leaving half-empty glasses of water after work. His first decision was to restrict the amount of drinking water available at PT Bank Central Asia’s headquarters. This kind of observation helps increase business efficiency and avoid cutting important spending such as staff cost.
I have always encouraged my clients not to cut staff salaries. I believe that employees should be at the heart of the business like the customers.
I will show you which other costs you can reduce, and can have a high impact on your financial results. So start saving money now!
Do you know which costs to reduce?
1- Buy used equipment
Why buying brand new vans or heavy equipment, when you can buy used equipment (in good condition) or even rent them.
2- Outsource whatever your company's weakness is
You can outsource or hire a freelancer/consultant to handle your digital marketing or your bookkeeping.
3- Review your expenses regularly
It is important to constantly review all expenses and try to look for reductions, such as unnecessary subscriptions, programs...
4- Negotiate your rent
Especially in tough times, you can gain a lot by negotiating your rent with your landlord or search for a cheaper option.
5- Negotiate with your suppliers.
Review your production costs, look at ways you could negotiate discounts with your supplier. You could also conduct market research on other suppliers who could offer more or the same at a cheaper price.
6- Take a look at your processes
Some of your business processes might not be effective and efficient and these can cost you a lot of money. Have a look at your manual processes, do you see duplicated tasks?
Regardless if you are a big company or a small business, cost-saving is very important. Although it is very easy to reduce staff costs, there is no real benefit in doing it if your other costs are not reviewed first. I always say to my client that cutting staff cost should be the last resort. Looking at your expenses regularly is a very good exercise and it can save you a lot of money. Don't forget to roam around and look for the half-empty glasses of water! If you are not sure how to tackle this exercise you can always contact us because it is crucial to reach business efficiency.