4 Smart Ways to Reduce Costs Starting Right Now

Your sales, marketing, and customer service teams make it possible for your business to succeed with clients, but turning a profit also depends on keeping costs as low as possible.

From getting the best price out of your suppliers to cutting waste, there are plenty of ways to reduce expenses. Here are four cost containment tips for your company. 

1. Create a culture of cost reduction.

An emphasis on savings needs to start at the top. Management should model the cost reduction mindset, explain how it benefits the organization, and make it a part of the company’s culture. Take cost-cutting seriously and reward employees who consistently create savings for the business.

This means going beyond simply looking for deals when buying office supplies or finding a shipping partner. Look for savings in all areas. From insurance and payroll to telecommunications, where services can save you money not only on your phone and data plans, but also on mobile security and shipping. There are opportunities to cut your expenses in many areas.

2. Don’t automatically equate loyalty with savings.

“If you’re not having an ongoing dialogue with the supplier—if that supplier is just silent and they remain a supplier for a long time—then more times than not the company is overpaying,” says John Hall, a senior principal consultant at Expense Reduction Analysts.

Continue to do your homework on competitive costs and the number of options available to you. Old advice says sending out three bids can land you a better price, but Hall says not to stop at three in order to find the best price. “It’s wise to get as many as you can,” he says.

3. Prioritize transparency.

Know exactly what you’re buying, what you’re paying for it, and who is doing the buying. If you have transparency on what you need down to the most detail possible, it’s easier for suppliers to give you an accurate bid. It means that a supplier doesn’t have to build in extra margin for uncertainty on the goods they’re selling to your company.

Also be clear about how to approach cost-cutting in different areas. Hall says a common misconception companies have is that a strategy for reducing costs in one category of the business will work for everything else. “Every category is uniquely different, so you can’t assume that a strategy in shipping will have the same outcome in office supplies or in waste management,” he says.

4. Remember that sometimes the best way to save money is to spend some.

One prime example is security. A frugal business owner might ignore security because he or she thinks it’s too expensive. But that type of decision leaves your business vulnerable, and no business is too small to fall victim to a hack or other type of malicious attack. Sprint Business offers highly affordable security solutions for virtually every type of need— cybersecurity, Wi-Fi security, device management, authentication, DDoS protection, and more.

The trick is knowing which investments set you up for long-term success vs. those that waste your most precious resource: money.

SOURCE ENTREPRENEUR - Published on March 11 2020.