Money saving tips
Unfortunately there is no easy way and each decision will have flow on effects. There will be some ‘low hanging fruit’ costs that will be easy to remove straight away but you will quickly find that beyond that, careful consideration must be made before cutting costs especially if it starts to affect how you generate revenue.
Where to start?
Assess what expenses don’t directly impact your ability to generate revenue and start there.
Things like subscriptions, general expenses, telephone etc come to mind. It might not necessarily mean cutting the cost completely it may be finding a cheaper alternative or incurring the expense less frequently.
What about the expenses that do affect my ability to generate revenue?
Those expenses that are directly related to generating revenue but might not be working as efficiently as possible also need to be looked at.
Complete a ROI (Return on Investment) on these costs. Think advertising & marketing, website and SEO, purchases, front end POS systems. Talk to these providers, challenge them, ask them how you can work together to make it work more efficiently and get either more efficiency or better revenue generation.
Fixed Costs?
Next consider the fixed costs that you do have like insurances, financing, accounting and bookkeeping, legal fees, etc and ask yourself is there a cheaper option for these.
Just because you have used a provider for a long time doesn’t mean that they are still a great fit. But again have the discussion. They may have other options for you to consider.
Reducing head count?
This is never a nice conversation for any employer, however is sometimes necessary to ensure the survival of your business.
Reducing head count in any in any environment is difficult and would recommend you engage a HR advisor to assist you through the process. With the ever changing legislation and rules around this IT WILL HELP!
Employees usually make up a significant cost to the business however you need to have a deep understanding of the work that employee does and whether that can be absorbed by the existing team. Doing this incorrectly can cause other team members to become frustrated and unmotivated.
‘You get what you pay for’
Everyone has heard the saying that ‘you get what you pay for’. This rings as true today as it ever has.
With any of the above cost cutting exercises an element of consideration must be given that you may not be getting the quality that you did when you were paying more which can be detrimental to the performance of your business.
An example of this is you seek to reduce your accounting costs, as a result of the lower price it may mean that you receive no advisory component and instead of catching up once a quarter you may only meet once a year to complete your tax.