When you were a lean start-up, it was easy to do everything with your small staff, with each of you wearing multiple hats and learning to do a variety of tasks. As you grow, you can remain lean through a variety of cost reduction techniques.
Identifying the right cost reduction measures may take some careful consideration. In most cases, however, one or more of these four areas will yield measurable results and give you room to invest in growth:
Outsourcing: One major area that prevents the healthy growth of small- to mid-size businesses is the desire to keep everything in-house. It seems cost-effective, it feels more secure, and it’s the way you’ve always done it. Consider this, however: when you hire out a segment of your tasks, you free yourself up to run your business and strategize about your company’s future.
Bookkeeping, payroll, and accounting are some of the first areas companies choose to outsource. After all, it takes a lot of time and effort to keep good records and track all the ways your decisions impact your finances. Also, as your business grows, you may find that hiring an accounting firm to do a few hours of work each week is much more cost effective than hiring a dedicated accountant full time.
Process improvement: Many companies get bogged down with the concept of “that’s how we’ve always done it.” Don’t fall into this trap. You should always be on the lookout for ways to streamline your processes. Otherwise, you’ll hire more staff than you need and productivity will suffer.
Automation: This goes hand-in-hand with process improvement. Whether you’re purchasing SaaS solutions or simply fixing your existing system to eliminate double entries, there are opportunities for automating business processes that result in a cost reduction. Keep these considerations in mind as you automate:
- Know your business needs before you begin shopping for a software solution. Otherwise, it’s easy to get distracted by flashy options and buy something more expensive than you need.
- Find out if you can negotiate costs. Your provider may be able to reduce your monthly bill, depending on how often you expect to use the software.
- Less may be more. For each application you add to your environment, you’re going to add complexity, too. Start with simple tools that meet your needs and then you can decide later if you need the flashy options, too.
Energy costs: This means more than turning down the thermostat in the winter and asking everyone to bring a sweater. Consider switching your sales team’s fleet to cars with better gas mileage. You can also implement the use of video conferencing or webcasts to cut down on travel that occurs solely for staff meetings.
Want to learn more about cost reduction techniques for your company? Talk with our consultants at Copper State Communications for a comprehensive consideration of the costs of your technology services and innovative ways to reduce them with our full suite of solutions.