In order to be a successful entrepreneur, you not only need to be able to keep your costs low, but you need to make sure that the quality of your products and services never suffers. This is paramount to making sure that your customers, the most important people in the equation, are kept happy.
Whether you want to reduce operating costs out of desire or necessity, the options that you have available to you are varied enough that you should be able to find a solution that fits your company.
With that in mind, let’s look at how to reduce operating costs and what other entrepreneurs, as well as business experts, have done in the past.
- Re-evaluate the Roles of Your Employees – Who does what in your company? One way to keep operating costs down is to give an employee as many tasks and responsibilities as they can reasonably handle. Practicing this is a balancing act. You don’t want to burden an employee with too much work because that could lead to something only being partially done, if it gets done at all. At the same time, you want to make sure that employee has enough work that they always have something to do. Making sure that workloads are distributed as evenly as possible keeps you from hiring two people for a job that can be done by one. Efficiency like this is one of the cornerstones to cost reduction.
- Look at How Much You Spend on Office Supplies – When thinking about how to reduce operating costs, going paperless can be a big help for your company. See if you can send invoices, statements and other documents electronically rather than sending them through the mail.Besides that, you can also start buying other supplies in bulk as a cost cutting measure. You’ll like continue using things like pens, paper clips, staples and other supplies that always seem to run out soon rather than later, so buy more now and you can save money later.
- Restrict Travel – Do you or your employees spend a lot of time traveling? If you do then this can eat up a lot of time and money as you travel from place to place in order to meet with clients. For clients with whom you have a longstanding relationship, try holding your meetings via conference call. This can dramatically reduce costs and allow business to be conducted much faster than it normally would be.
- Take a Look at the Services That You Use – Does the frequency of use justify the cost? This is an especially important question for things like computer equipment. If you’re wondering about how to reduce operating costs, then you can save a good amount of money on your company’s information technology by outsourcing things like data storage and equipment maintenance. This not only keeps you from having to worry about downtime due to maintenance and equipment failures, but you also don’t have to worry about upgrading equipment when you outsource your IT infrastructure.
- Consider Promoting Alternative Work Schedules – This has been a popular option for many employers who have been trying to figure out how to reduce operating costs because it produces a number of benefits.
If you allow your employees to set the hours when they will work, you’re more likely to retain key talent and not have as much turnover. By not being confined by a traditional 9 to 5 schedule, your employees can get their tasks done when they feel most comfortable working and will be motivated to do the best that they can.
Keep in mind that this arrangement has to be met with some balance. While you can promote your employees setting their own hours, you may still require time for team meetings and collaborative sessions, so you want to work your flexible scheduling around those.
In the end, you have to look at various strategies related to how to reduce operating costs and figure out what is ideal for your business.
Of course, not everything will work for every industry. But, there are cost-cutting measures out there that will benefit you and help you reduce your overhead, while you continue providing the same level of quality for your customers.
Remember, running a business successfully does not need to be complicated. Keep it simple!
For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com. Follow us on Twitter @portalcfo
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Manny Skevofilax is a consultant and speaker that assists his clients with successfully navigating the challenges of growing their businesses profitably. Since 2003, Manny helps businesses to enhance their financial results by using his experience in strategic planning, financial statement analysis, operations, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at firstname.lastname@example.org.