Sunday, May 5, 2013

A Checklist for Strategic Cost Cutting


Q: What are some basic ways to cut costs for my small business?

    When a business owner asks this question, my first response was, "Is this what is most important right now?"

To find the answer, I would like to know if there is a thorough analysis of corporate financial statements and key performance indicators, and the relative profitability of the product or group of products, including the customer or customer group, salesperson or sales channels. I ask this because the information needs - as opposed to measured and rational desire - to cut costs is an indication that something is not working in the business model.



3 belt-tightening Mistakes to Avoid


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Do not get me wrong, though - reducing the amount of money to fly if the door is a good strategy, and once I am convinced that cutting fat from the budget of sound business sense, I would use the following checklist to begin handle the cost.

New system Dial Telecom. Everything is up for grabs: landlines, internet, wireless providers, equipment and service plans. The first step, contact the Telecom consultant will analyze your needs may not be a constant charge. Instead, they take a percentage (usually 50 percent) of the savings they find, many consultants do not appear to you unless they can uncover enough savings to make it worth their time - and to you.

Quick Tip: If you are not using a modern VoIP-based system for telephone and internet connection a few, you should - it can save up to 50 percent of the cost of your equipment.

Implement policy no-brag business trip. Mud Fund budget travel and entertainment is often a black hole expensive tickets, suites and luxury foods. Finish this by instituting a written policy requiring employees to look for discount or cheaper alternatives. Then implement them. I had to save my company more than $ 5,000 per month by the staff for their travel budget.

Move your IT to the cloud. Move the software and digital files from your desktop into a virtual environment can be accessed via the internet can reduce the need to upgrade equipment and software every few years. To put perspective clouds efficiency savings, startup now reduce their IT build-out by a factor of 10 to 1 compared to 10 years ago.

Make crime overtime. For businesses hourly wages, overtime kill the bottom line. Yes, the weather and other factors may require more manpower at times, but in many cases, a business will know when to expect them. Intelligent planning to expand full-time or part-time staff saturated straight-time overtime wages to nearly eliminate the pay time-and-a-half. I've seen cases that resulted in savings of producing 10 to 20 percent.

Using credit to get discounts with vendors. Take advantage of early payment discounts offered by your vendor. If they do not offer them, ask them. Then hit your credit limit to pay your vendor immediately. Here's why: A 2 percent discount for payment within 10 days is equivalent to 72 percent APR. At that rate, it is almost guaranteed to come continue to use your credit limit. You also will probably move to the head of the line as a VIP customer from a vendor you.

Whatever steps you take, do not wing it. Writing a plan and assign clear responsibility and managerial authority to implement each task. By the time you're done with the first round of cost-cutting, you're ready - and more experienced - to do it all again.