Here are 10 cost-saving ideas that integration firms can implement starting now to get 2024 started off right.
As I do every year at about this time, I’ve been thinking about the lessons NSCA members learned over the past 12 months. I want to share my advice and cost-saving ideas here to help you wrap up the year on a positive—and profitable—note and get ready for what’s to come next year.
Here are 10 cost-saving ideas to implement now to get 2024 started off right.
1. Conduct reviews of benefits programs and insurance
This includes workers’ comp rates, vehicles that haven’t moved (do you need them?), 401(k) matching and fee reductions, business interruption insurance that never pays claims, etc. Combine policies and riders, reevaluate coverage, look for savings, and align costs with current headcount.
2. Analyze staff alignment
Integrators often think of “fully utilized people” as synonymous with no staffing problems, but that’s not true. Just because someone is “fully utilized” doesn’t mean they’re being used to their full potential. They could be spending time on non-productive or unnecessary tasks. This may even lead to non-essential overtime costs. For example, you may discover that someone is spending time simply supervising processes that no longer need supervision because they’ve become routine.
3. Turn expenses into savings
Identify areas where additional expenses can become cost-savings measures. IT is a great place to start. What really requires backup to a Tier 3 data center vs. traditional cloud storage? Do you have active software licenses for programs that are no longer being used? Are all paid company phones and hot spots still active and being used?
4. Fix bad spending habits
This is where “ownership thinking” comes into play. Incentives can be used to drive unnecessary spending out of the company for good. For example, use your vehicle-tracking software to make sure company-owned vehicles remain parked on the weekends (unless, of course, someone is working approved overtime).
5. Plan for scalability
The best cost-reduction strategies allow you to scale based on how your business looks now and in the future. For example, the transition to electronic invoicing now is a cost-saving idea today that will also enable new opportunities for you and your customers in the future, including managing billing dates on progress payments, speeding up cashflow, etc.
6. Streamline excess inventory
Now’s the time to get rid of the equipment you’ll never use! Keeping it only takes up valuable space and wastes time for those who have to manage and move it. Ask one of your underutilized staff members to wrangle this equipment and determine what to do with it: sell it, donate it to students who want to get their hands on some real AV technology, etc. One NSCA member has tasked its receptionist with finding ways to turn inventory into cash.
7. Combine functions and events
If time is absolutely at a premium for most of your staff members, then consider combining company functions and events temporarily. For example, instead of holding two in-person or virtual meetings on different dates—one for a company huddle and one to celebrate company milestones—combine the two.
8. Control operating expenses
If you own your facility, then making energy-efficiency upgrades to lighting, HVAC systems, etc. can pay off quickly in the form of lower utility bills and rebates.
9. Reduce banking and credit card fees
Rates for the PPP loan are far less than your line of credit: Make sure your bank adjusted for this. Evaluate credit card usage policies and the rates you pay for their use. Prepay invoices where you can to lower your costs and even take advantage of early-payment discounts.
10. Lower legal and professional fees
Rather than paying an attorney for specific documents, for example, you may have access to templates you can use in the Essentials Online Library.
For more tips like these, download our NSCA’s Financial Leadership 101 document, which includes 24 important financial metrics that integrators should consider monitoring in 2024.
But most important of all: Don’t forget to spend time with family and friends. Enjoy this time and get ready for a successful 2024!
Chuck Wilson is CEO at NSCA.