The old business adage that you “have to spend money to make money” has been exerting a powerful influence on the ways that businesses think for a long time now. As a statement of truth it is trivial at best and as an iron-clad rule of business it can sometimes reveal itself as being outright dangerous.
There are a great number of situations where it would greatly benefit a business in terms of profit and overheads to cut down on the amount of money it was spending. There are a whole range of ways in which companies can cut their costs while making sure that the most important aspects of your business are safeguarded.
There are two things that are central to making a company what it is; the manpower that powers it and the quality of the products or services it produces. When a business over stretches, the result is often a need to cut the cost of labour or reduce the quality of the finished product in some way, but this is flawed logic.
So whether you drastically need to reduce your overheads or you are just looking to make your use of resources more efficient, here are some great ways to reduce your business costs without losing any quality or manpower.
Reduce your energy use
Even a small company, with under ten people huddled around two three desks in a single room, is going to be a fairly energy intensive proposition. Getting a good idea of the way that your company uses energy (by taking regular meter readings and using energy monitoring technology) will always reveal ways in which money can be saved.
There are two main ways to reduce a company’s energy costs, through either reducing consumption or by taking advantage of government schemes and other strategies. The former strategy involves things like switching to compact fluorescent lighting, making sure people turn off lights and computers when not in use (or placing them on a timer) and retroactively improving the efficiency of your heating and cooling systems.
The latter involves utilising things like government tax credits, grants and incentives or switching suppliers to take advantage of better rates and introductory offers.
Reduce your communication costs
The internet has largely eliminated the need for complicated landline telephone networks, meaning that most businesses can greatly reduce their communication costs by utilising email as well as programmes such as Skype and Basecamp to communicate with clients. The low cost of using the internet to communicate also means that you and your employees can work from home, meaning that you can make further savings on infrastructure costs.
This point is linked to the above point. If travelling to meet clients is a big part of your monthly expenditure, you may want to consider the possibility of conducting business meetings over the internet. There are a number of web conferencing platforms available that will allow you to connect with clients or business partners for a fraction of the price that it would take to travel there. There has also been a significant growth in the effectiveness of online collaboration software that allows geographically distinct individuals to work together in real time.
Make your packaging more efficient
Another area where significant savings might be feasible without directly affecting the quality of the finished product is the packaging that it comes in. Is it possible to use less material or to utilise different materials then you are currently using in order to reduce the outbound costs. Changes in packaging design feed directly into manufacturing and distribution costs, so making smart changes can mean considerable savings.
One increasingly popular way for companies to reduce costs is to integrate previously discrete packaging and distribution nodes in their supply chain. By creating packaging that can easily be assembled in the distribution centre in with little in the way of additional space or manpower required, a company can lower its inventory , freight, equipment and material costs.
Printing paper can be a huge source of regular expense for companies. It can be easy to underestimate just how much paper an organisation can churn out on a weekly basis if everyone thinks that they can use the printer freely. Modern technology actually makes going paperless not as scary and daunting as it may at first seem. Either by beginning to store records digitally or by implementing imaging and workflow automation, going paperless is a great way to begin reducing costs.
Think about space
If you implement all of the changes above, with your employees working from home and energy and packaging costs dramatically reduced, you should find yourself in a position where you can stand to dramatically reduce the amount of property that you need. The cost of the buildings you are housing to gather the various pieces of your organisation together on a daily basis is likely to be one of your biggest expenses each month, so any reduction in the amount of space you need is likely to greatly reduce your business costs.
If you follow these steps then it is likely that you will have managed to significantly lower your business costs without affecting your employees or the quality of the work your produce at all. In this case you definitely don’t have to spend money to make money.
Are there any other ways a business can reduce its costs without affecting its manpower or the quality of what it produces?
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- How to Reduce Your Business Costs Without Losing Quality or Manpower - October 26, 2013