11 Ways to Cut Business Costs
When a business does not have enough money, the owner is looking for ways to increase income. Looks at marketing, advertising, sales, production. And it is right! But “extra money” can be obtained not only due to revenue growth. Irina Narchemashvili, CFO of ATManagement Group, offers 15 ways to reduce company costs without sacrificing development
In my experience, a business can save between 50,000 and 5,000,000 rubles a month, without sacrificing its work. I give you 15 ideas on how to spend less and save more on yourself. Immediately agree. I give short receptions so that you are not stuck here for a week.
Now take a notebook and pen. Read thoughtfully and write down ideas! Forward!
1. Keep a record of expenses
You will be surprised, but sometimes you can cut costs by simply starting to take them into account. Write down every ruble that a business spends over a month. Write out all the expense items, then analyze and draw conclusions.
Analyze suppliers constantly, and not once a year. Ask for discounts – often they will be given to you. Buy in bulk or negotiate joint procurements with other companies. Look for cheaper analogues, without sacrificing quality. Think about how you can go to your own production.
We transfer sellers by a percentage. The rest we reduce the salary part, add the bonus and tie it to the company’s revenue / profit. You can set thresholds below which the RFP cannot fall / rise if you are afraid to immediately switch to a frameless system.
Begin to analyze the effect of each advertising source separately. It is desirable to measure the effect not only of applications / calls, but of sales. Implement analytics. Refuse from advertising that eats up the budget, but does not give an exhaust.
Invest 80-90% of what is verified. For creatives and experiments – 10%. Think about whether you can work with a barter advertising agency. We have worked several times.
Perform ABC and XYZ analysis. Take away the slow-moving positions that occupy a place in the warehouse, are rarely sold, and bring little profit. Look for more marginal counterparts.
ABC and XYZ analysis is applicable to buyers. In any business, there are customers who “eat up” the brain, rarely buy, and pay little. At the same time, managers spend time and effort on them. Save! Use the 80/20 rule. Find 20% of those who make you 80% of the revenue and direct all your efforts to work with them.
7. Cost of sales
In addition to working with suppliers, consider automating processes, changing production technology, and purchasing cheaper raw materials. Quality should not fall!
8. Accounts receivable
If possible, switch to postpay. Allocate an individual person to collect debts, this should not be done by the seller. All managers do not pay from the shipped goods, but from the money received.
Develop clear rules for working with debtors – there should be a system of reminders, fines, warnings, rewards. Never ship a product / service if the buyer has an overdue receivable.
9. Office needs
With a magnifying glass, consider all expenses – from coffee and cookies to refueling a printer and paying for Internet. First, evaluate the real need for these expenses. Secondly, evaluate the frequency of repeat purchases (do you have 100 page diplomas printed on your printer). Third, evaluate the market value. We cut the excess. Necessary – optimize.
10. Staff costs
Introduce a cost request system. Employees must state in writing what they want to spend money on, why and why it costs so much. Consider these applications and pay bills once a week – and bookkeeping is easier, and you are not pulled, and the possibilities for theft have been closed.
I will say right away – I am not a great expert. But I have dozens of acquaintances of entrepreneurs who have saved millions by switching to a different taxation system. The main advice is to work in white and do not hesitate to ask the accountant why you pay so many taxes and whether it is possible less.