<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=290086984736480&amp;ev=PageView&amp;noscript=1">
Search
word-map-thumb

The Alternative Board Blog

Tactics for Strategic Cost-Cutting in Your Business

Dec. 10, 2017 | Posted by The Alternative Board
Strategic Cost-Cutting

For many businesses, cost-cutting becomes necessary in times of sales slumps and reduced revenue. But strategic cost-cutting is a different matter altogether. This process, as Forbes contributor Rodger Howell notes, “helps ensure an organization is ready for growth” with a focus on “aspects of the business that are controllable while freeing up resources” that can lead to future growth.

Become a better negotiator. Business is based on transactions, specifically those that in some way benefit both parties, the seller and buyer. As CEO or business owner, you’re often well-positioned to negotiate on behalf of your company. Are you making sure to keep your negotiating skills at their highest level?

A skilled negotiator walks into a meeting with a vendor, for example, having “already explored all of the possible outcomes and how each aligns with [their] overall strategic plan.” Armed with the knowledge of how much vendors charge for the same types of products, you can cut costs by aggregating purchases to achieve savings in volume.

Identify cost-saving measures linked to multiple business locations. If your company operates offices in several locations, try performing a “geographic income statement” that pinpoints areas where budget cuts can be made without sacrificing product or service quality. If one area regularly outperforms another, it might be time to shut down the underperformer and focus resources where they gain the highest ROI.

Explore flexible scheduling for employees. A great deal of money is spent on supporting employees who work traditional hours in a traditional workplace setting. If your company hasn’t already explored the potential benefits of flex-time and telecommuting, now’s a good time to start. When employees work remotely, you can reduce expenditures related to utilities and even negotiate a reduction in your building lease or rent payments. These savings can make a big difference spread over months or years.

Want additional insight? Download Hiring a Business Coach for Your Small Business now 

DOWNLOAD

Cut travel-related expenses. Business travel may be necessary, but it doesn’t have to involve needless expenses. CNBC offers these budget-slashing travel tips:

  • Book your flights as far in advance as possible.
  • Leverage all the hotel chain and airline rewards programs you can.
  • Forego the convenience of flying into a major airport hub if the costs involved in flying into smaller regional airports are significantly less.
  • Encourage virtual meetings through Skype, GoTo Meeting, Web Ex or other digital resources.

Again, minor savings here and there can add up to big reductions over time.

Consider a hiring freeze. It’s never a good idea to stop hiring new talent and it’s also desirable to avoid any significant layoffs. Instead, if personnel costs become too burdensome, consider a hiring freeze for all non-essential positions. Doing so enables you to “consolidate the employees you have to complete the work that is essential for serving [your] customers.” And you can devote more time and resources to recruiting candidates for your more difficult-to-fill positions.

Adopt a smarter approach to operations. For manufacturing businesses, there’s always savings to be found in automating or combining repetitive processes. This same principle can be applied to many other types of businesses seeking ways to increase productivity without spending a great deal more on equipment or personnel.

Look into acquiring (or leasing) new technology that optimizes routine operations. Of course, there will be initial acquisition costs, but over time, you’ll likely see the kind of cost reductions you’re looking for. To stay competitive in the marketplace, “there’s really no other option than enthusiastically embracing the opportunities new technology provides.”

Embracing a strategic approach to cost-reductions can help keep your business lean, agile and prepared for challenges in the future.

Want to learn more about strategic cost-cutting? Check out TAB's PULSE Survey on Financing Strategies.

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board

Related posts

The Best Business Practices: What You Need To Know
Feb. 27, 2020 | Posted by The Alternative Board
As business scales, circumstances change, and every company must adapt to new situations. Some businesses decide to experiment with different solutions to find out which suits their needs best. While...
Boost Retention by Building a Great Workplace Community
Jan. 30, 2020 | Posted by The Alternative Board
The term “company culture” gets tossed around a lot lately, and it’s true that a strong corporate culture can make a big difference in boosting employee recruitment and retention. But, increasingly,...
What's the Difference Between Business Development and Sales?
Jul. 18, 2019 | Posted by The Alternative Board
At first glance, there doesn’t appear to be much distinction between business development and sales. Aren’t both activities geared towards generating more profit for the organization? Isn’t a sales...
A Quick Guide to Crafting an Effective Call-to-Action
Jul. 11, 2019 | Posted by The Alternative Board
With all the talk about content marketing and direct mail marketing that businesses must try to keep up with, one essential element sometimes gets lost in the mix. Improving click-through rates to...
5 Customer Acquisition Strategies that Spur Growth
Jul. 9, 2019 | Posted by The Alternative Board
Maintaining a strong base of existing clients is essential for every business, but acquiring new customers is equally important. Without an influx of new and prospective customers, a business may...
The Reality Factor: How Direct Mail Marketing Is Changing
Jul. 4, 2019 | Posted by The Alternative Board
Is direct mail part of your current marketing strategies? Using tailored messages to attract targeted prospects is a valued marketing tradition. This encompasses a broad range of materials, including...
Five Tips to Effectively Scale Your Business' Growth
Jun. 27, 2019 | Posted by The Alternative Board
All businesses need to grow, but at what pace and how quickly should they scale that growth? These questions intrigue (and sometimes torment) business owners, because there’s no single “right” answer...
Create a Customer Satisfaction Survey that Gets Results
Jun. 20, 2019 | Posted by The Alternative Board
Crafting a customer survey that gauges satisfaction with your business isn’t as easy as it looks. If the survey is comprised of misleading questions, or comes burdened with too many instructions,...
4 Tips on Creating a Great Customer Experience Strategy
Jun. 6, 2019 | Posted by The Alternative Board
In your company, how much thought is given to the quality of interactions between your customers and your business? The experience your customers have when interacting with your brand can make all...
Are You Looking to Expand Your Business? We Can Help You
Jun. 4, 2019 | Posted by Phil Spensieri
Over the years, I’ve coached many business owners as they’ve worked to expand their business. Whether it’s the physical expansion of your office space, expanding your workforce, or investing in new...