Three surprising ways to cut costs and boost the bottom line
So you've managed to weather the Great Recession, although you also realize the business environment remains shaky. Hopefully you've seen the importance of managing costs without compromising the company's core values or the ability to properly service customers.
Not every cost control decision has to be painful. Here are three examples that might help you boost the bottom line.
1. PLAY THE FIELD
If your employees have cell phones, you may well be paying more than you have to for them. That's according to Heather Pauls, president of HPCI in the Calgary area. Pauls should know. She worked in the mobile phone biz for over a decade, doing whatever she could to keep clients from switching carriers.
"It's a very competitive market," she says. "Unless you're armed with industry knowledge of what's really available to you from a customer retention perspective, the reality is you're just not getting the best deal available."
HPCI does a three-month assessment of clients' mobility usage to identify how units are used. Every penny you spend is accounted for. Knowing what competing carriers will offer, HPCI is able either to negotiate a reduction with your carrier or show you exactly what you can save by changing providers.
Pauls says that on average, clients' cell phone expenses are reduced by 42 per cent.
2. GET A CHECKUP
Blindly cutting costs doesn't lead to long-term success.
"It's easy to cut costs," says Mark Brown, director of business consulting services, Meyers Norris Penny. "You can dump a bunch of people, sell some assets that are sitting in your yard, or whatever, and then next week get the project of a lifetime. But now you're hooped."
Instead, he says, spending should be aligned to what you want to have happen in the future.
A "business diagnostic" is a holistic look at every aspect of your operation-your customers, employees, operational processes and procedures, and financials-to ensure everything being done is going to get you where you want to go.
Through the diagnostic, you can see where you may be wasting money, such as on an unnecessary process. You can also identify areas of spending that may look as if they could be cut today, but are actually investments in the future.
Says Brown: "You want to, if you can, hold the position that, over the next three to five years, we're aiming for a spot and so everything we do is lined up to that goal."
3. MANAGE FUEL
Taking equipment off site for fuelling eats up time and money. According to 4Refuel, a British Columbia-based fuel management company with an office in Calgary, companies lose about 20 minutes each day per vehicle.
Having fuel brought to the site reduces the time your employees spend fuelling so that those hours can be used to make money and get projects done faster. 4Refuel also institutes what's called a total fuel management system so you can see how much fuel you're using and find ways to reduce your actual fuel costs.
Billing is done online and you can generate a variety of reports with information that can be used to make critical decisions about equipment, operator labour, and maintenance.
The company claims it can reduce refuelling costs up to 20 per cent. 4Refuel.com includes a calculator that gives you an immediate idea of the savings you could see.