All good businesses dedicate time and effort into reviewing their processes and looking at ways that they can make improvements and reduce costs. Sometimes it can feel like you are too close to the business to be able to stand back and see the bigger picture in terms of ways that cost savings can be made.
Decisions related to staff changes can also be very difficult to make if you are involved in the everyday running of the business. It can help to either get someone else to assess you business for cost saving solutions or do some research into what other businesses are doing. If you don’t keep up with the cost saving ideas then your competitors will be getting an advantage over you, so it pays to be on the ball.
There is a wide range of processes and other cost saving possibilities within any industry, so let’s look at some of the ones that apply to most industries:
Automation – System automation can produce significant savings. Although you might have a lot of start up costs, when you compare to the long-term costs of the manual activity you will be able to see how worthwhile it could prove to be. From email automated responses, telephony automation and a whole host of other types of automation – pretty much anything is possible these days. Think about ways that your manual tasks could be automated or get an automation expert to analyse your set up.
Outsourcing – For some, ‘outsourcing’ is a naughty word that takes away jobs. However, the reality of running any business is that if your operating costs are higher than your revenue, then your business won’t be around for very long. Outsourcing is not always about moving work from one country to another, it can mean paying a third party for services instead of setting up an in-house team.
Set up bases at cheaper locations – Whether you are a small shop on a high street, a large UK based bank or a global manufacturing firm, the costs associated to your location(s) can be the difference between liquidation and long-term success.
Some large companies in the UK have found that they can set up operations a lot cheaper by moving base. For example, companies like the BBC have set up a base in the Salford area of Manchester, which is considerably cheaper than the London cost to build or rent premises. Great transportation structures mean that other cities that are cheaper to buy or build premises in are a more attractive option.
It is not just one UK location to another that can benefit from this either. If you look at car manufacturing for example, we are seeing more and more auto manufacturers in Mexico and other countries where the workforce is cheaper.
If you run your own business then you will be keen to bring your costs down, and whilst some decisions are not easy to make if they impact people’s lives, the current economic climate means that all cost reducing options must be explored.