In the last few months, we’ve talked at length about ways to generate revenue and keep business going as organizations shift to working from home or shut down completely (at least for the short term).
As you implement these new tactics to generate income, there are also opportunities to reduce costs along the way (especially if you have employees with free time right now – they can help with put them into action).
After speaking with many of our members, we created this list of real-world approaches to quickly cutting costs. Not only are these tactics great to consider right now, but they’ll also serve you well in the future.
- Review your benefits programs and insurance. Look at your 401(k) matching program and search for fee reductions to better align costs with current staff headcounts. Then analyze your insurance policies – from workers’ compensation rates to fleet vehicles that haven’t moved and business interruption insurance that never pays claims – and look for opportunities to combine, re-evaluate coverage, and obtain savings.
- Consider staff alignment. When we have “fully utilized staff,” we often think we don’t have a staffing issue. But take a closer look. Are some staff members supervising processes that no longer need supervision because they’ve become routine? Are they spending time on non-productive activities? (And are they earning overtime to complete these tasks?) If so, we bet you can find ways to better utilize their time.
- Weigh cutting vs. optimizing cost strategies. Identify opportunities to transform additional expenses into cost-saving measures. IT is a great place to start. Consider what needs to be backed up to a Tier 3 3 data center vs. traditional cloud storage. Scrutinize your software licenses and compare them to staff utilization. Some members recently uncovered software licenses they had been paying for years that were no longer in use!
- Fix bad spending habits. Here is where “ownership thinking” comes into play. Incentives can be used to drive unnecessary spending out of your company for good. For example: Use vehicle tracking software to make sure company-owned vehicles are parked and not moved on weekends (unless, of course it’s for a business purpose).
- Pursue sustainable, cost-saving measures. The best cost-reduction strategies allow you to adjust to the way your business looks now and in the future. The transition to electronic invoicing, for example, is a cost-saving idea and a way to boost client satisfaction. Also think about ways to manage billing dates on progress payments, speed up cashflow, etc.
- Streamline inventory. Sell the stuff you’ll never use! Ask an underutilized staff person to list your unused equipment on NSCA’s online StockroomExchange, where you can sell your overstocked inventory to other integrators that need it. One NSCA member company charged its receptionist with turning inventory into cash over the next few months.
- Combine functions and events. Instead of holding several virtual meetings on different dates, combine milestone celebrations with company huddles and other meetings (for now) to save time.
- Investigate cell phone and utility costs. Use this time to update your office space with energy-efficient LED lighting, HVAC systems, etc. Conduct an inventory of company cell phones and hotspots, which are likely charged per unit per month. It’s a great time to conduct an inventory and ensure that you’re only paying for active, authorized units. (You’d be surprised at how many units have been “transferred” or have gone missing but are still being invoiced.)
- Evaluate banking and credit card fees. Rates for the Paycheck Protection Program loan are far less than your line of credit. Make sure your bank adjusted for this. Use this time to evaluate credit-card usage policies and the rates you pay for credit card usage. For the next eight weeks, consider prepaying invoices to lower your costs.
- Pursue legal and professional fee reductions. Apart from NSCA membership dues, of course, this is a good place to look for cost savings. Rather than paying an attorney, for example, leverage the templates and documents provided in NSCA’s Essentials Online Library.
We’re certain that these aren’t the only ways to keep expenses and businesses running lean – but they offer a good way to get started. Have you tried any of these cost-cutting measures? Or implemented other tactics we haven’t mentioned here? Let us know!