Living in today’s unpredictable business environment, one of the most frequently asked questions we receive is, “How can we cut our operating costs?”
Streamlining business operations, while containing overhead costs, is the real secret to profitable growth. Without coming to grips with reality, your firm will face the risk of severe loss.
Steps that you can take, starting today, to ameliorate issues and make your office more effective and efficient:
- Establish a Budget – Before you decide where you can afford to cut costs you must have control over your costs. A budget helps you both analyze expenses and income, as well as allows you to forecast financial variances.
- Develop and implement systems for everything you do in your firm – Implementing workflow processes increase efficiency which will in turn have a positive impact on your bottom line. Many firms tend to overlook their operational systems and workflows especially during a good economy. Review your firm’s operational systems regularly recognize the static processes because “that is the way it’s always been done”, and be flexible to change. This is imperative to reducing your operational costs and remaining viable amid the rising costs of operation.
- Align the responsibilities of your staff members to their specific needs – Review workflow for areas that need improvement or display a lack of clarity. Making revisions in a workflow and ensuring that there are no duplicate efforts or wasted energy will prevent you from superfluous costs. Besides cost savings, you benefit from significant increases in productivity.
- Invest in more training – It may sound ironic to invest more money while trying to reduce costs, however, investing more in your employees shows them that they are valued. There is an endless source of training models available online, which in-turn will also reduce your travel expenses. Employees who feel valued, are more engaged and more productive at work.
- Build Strategic Alliances – In our blog “Strategic Alliances Build A Strong Foundation For Long Term Success” http://aeschlapia.wordpress.com/2012/04/30/strategic-alliances-build-a-foundation-for-long-term-success/ we talked about how building strategic alliances positions your firm to stand apart from the competition. Share expenses with your alliances by implementing joint advertising/media promotions, shared mailing lists and shared educational workshop expenses. You will reduce your costs and improve your bottom line by meeting client needs.
- Outsource – Review the organizational structure of your firm. Pinpoint which roles could be outsourced, such as payroll or mailings. Also consider contract employees. Hire contract employees for special projects or ongoing tasks. Outsourcing and utilizing contract employees will give you more time to focus on building your business.
- Reduce office expenses – Consider converting to an electronic paperless system when possible and order supplies in bulk. Shop around for lower prices and negotiate a better price if you agree to purchase all of your supplies from one vendor. Reduce utility bills as much as possible, but not at the detriment of team effectiveness.
Reducing your operating costs without sacrificing the team’s operational effectiveness, the quality of service, and the value that you provide to your clients, will go a long way towards improving your bottom line.
Keep these principles in mind and implement them. You’ll find that your reduced operating costs will lead you down the path to substantial growth before you realize it.
Ironstone can assist you in developing the strategies needed to reduce your operating costs while strengthening your relationships with existing and potential clients. By being held accountable and responsible for the cost cutting steps above, you will gain control of your expenses and move towards a better bottom line.
Follow us as we explore each of Ironstone’s Fundamental 4™!
- Strategic Planning
- Business Development
- Operational Effectiveness
- The Human Element
You won’t want to miss our next in the series: The Human Element-The Performance Evaluation
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