Do you want to make savings in your business right now? You can. It may be that you have to wait until the actual savings can be made, but it’s never a bad time to create an action plan for business cost saving.
There will be some business costs that are fixed costs and are fixed until a specific date. Rent on your premises is a good example of this. For these expenses, you should take note of when contracts are due for renewal and make plans to shop around or to renegotiate your deal in advance, if only to save you renewing your contract in a last-minute flap never knowing if you got the best deal or not.
There are other areas in your business where you can start saving money straight away. There is the ever-present issue of whether you should cut costs in these areas, but at least take some time to think about all areas where you could potentially reduce your expenditure.
Check out our article about false economies in business cost reduction
Here are three areas you could think about right now
Waste management
By carrying out a waste audit immediately, you could identify where you could be reducing the amount of waste you produce and how much you pay for disposal.
You should measure all the waste you produce for a whole week at least. What exactly are you throwing away? How are you disposing of this?
Then ask yourself if some of this could be recycled or re-used? Could it be given away to someone who could use it? Could you sell your waste to re-coup some of the cost (for example, by selling food oil to a bio-fuel company?) Could you make better use of your waste space, maybe by squashing things down better?
Once you have a good grasp of how your company currently manages its waste, then you’ll be in a better position to reduce this, and then you can start negotiating with waste disposal companies.
Work with your current provider to see if there are ways of getting your waste disposal costs down. They may have some good suggestions for you which will reduce your costs without them being forced down on price or losing your custom altogether.
Just make sure if you do decide to switch to an alternative waste disposal company that they are fully licensed; if you inadvertently choose a cheaper company that turns out to be a rogue trader who fly-tips, it will be your company that faces a fine.
Check out this great example of cost-saving by a restaurant.
Agency and staffing costs
Some times of the year are never a good time to cut back on using temporary agency staff; the whole point of using agency staff is to cover a busy time without having to employ too many people on a permanent contract the rest of the year. However, agency staff don’t come cheap – you have to pay a premium on top of their wage to cover the agency fees, holidays, and more.
If you feel you’re spending over the odds topping up the workforce during the busy season, then have a good look at what you spend. Assess how much production time this money buys you, and how much it would buy you if you offered your regular staff some overtime instead. Your existing staff may be glad of the extra income, particularly around Christmas and other busy times.
The upside is that the work is being done by people who already know the job well so there should be good productivity levels with little to no setting in period. The downside is that you could fall foul of working time directives and wear your staff out. As with everything in business, you need to find a balance. They have every right to turn overtime down of course, but there’s no harm in asking first.
Another option is to recruit temporary staff but using your own means rather than going through an agency. Ask your current staff if they know anyone looking for temporary work. Don’t underestimate the number of people who are happy to work on a temporary basis – there’s an assumption that everyone wants a permanent full-time job, but that is rubbish. Just make sure you’re employing them correctly and that they’re aware it’s on a temporary basis.
See our blog post about reducing the cost of recruitment and staffing
Office supplies and sundries
A well-stocked office stationery cupboard is a thing of joy but it’s also hoarding a lot of value. A quick stocktake will tell you if you really need to place your regular monthly order this time around or if you can manage with what’s in there already and skip a month.
Make skipping a month a bit of an event. Challenge your staff to make their supplies go further. Get them to use scrap paper instead of binning it. Make them use all their pen ink up before throwing the pen away. If the staff know that there isn’t an almost-infinite supply of stuff in the cupboard, then they will be more careful. It will almost certainly make them think about the effect that frivolous behaviour has on the company’s bottom line.
See if you can make do with what you have lying around rather than just putting your monthly order together without thinking. If you can apply this principle to all your company’s expenses, you could save a huge amount.
Have you got any good ideas for making business cost savings?
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