subject: Cost Reduction - Stop Money Leaking Out Of Your Business [print this page] Cost Reduction - Stop Money Leaking Out Of Your Business
One of the primary reasons for businesses going bankrupt is that they are not good at controlling their finances. As costs are not properly controlled, cash flow inevitably suffers and, without enough money in the bank, the business soon fails. Therefore, it's no surprise, especially in the current economic climate, that lots of organizations are looking for practical ways that they can reduce their expenditure. There are a number ways to do that, with these being a good place to start:
Utilities - Too many companies never compare their gas and electricity providers. This means missing out on potentially huge savings. Don't think that it will be a pain and time consuming to change over, because it really it isn't. You should go through a broker as they have access to a wider range of tariffs than you would otherwise be able to access.
Outsourcing - Areas of the business such as IT, HR, and finance may be outsourced in order to reduce costs. Manufacturing, distribution, customer service, and marketing may also be outsourced to places such as India or the Philippines depending on the industry.
Banking - Remember that your bank charges are not fixed in stone. There are a number of areas where banks profit from your business and you should look to minimize these. For example, what interest rates are you being charged? What are you receiving for any accounts in credit? Lots of banks have different levels of clients, and paying a higher monthly fee may result in a lower cost overall through reduced transactional fees.
Business Rates - Rates change over time and they can be challenged every five years. If you feel comfortable, you can challenge them yourself or you can hire a consultant. When using a consultant, however, be sure that you are not charged up front and that the charges are based only on savings to your account. The biggest mistake is to assume your business rates don't change.
Telecoms - Due to the deregulation of the telecom market, your business has plenty of choices. Big brand providers can save 10% off line rental with ease. More savings can be found on call charges. In addition to making apples to apples comparisons, be sure to closely review any contract lengths.
Office Stationery - Combining suppliers and invoices not only enables savings by purchasing from one place, it also increases your ability to negotiate. This ability increases if you are part of a buying group. By monitoring your own usage and limiting the number of authorized reordering personnel, you can reduce costs. Using your own products can lead to 25% savings.
