Efficient ideas to reduce company costs
- 21 Sep 2023
The economic and social state of the world is deepening, affecting businesses globally. The entire supply chain has been disrupted due to conflicts while soaring energy prices led to numerous companies closing temporarily. Moreover, the cost-of-living crisis is hitting customers; therefore, the purchasing power has decreased considerably since the pandemic ended.
Overall, industries are entirely challenged by another problem, but some try to stay strong amid constant trouble. Some are re-branding or expanding their views, but most are cutting costs to save financial resources. Indeed, saving money may be the most advantageous option since it increases funds available in companies or free working capital.
So, if your company has similar issues and you have decided to cut costs, here’s how to do it efficiently.
Can’t buy equipment? Rent!
In some cases, it’s much better to purchase a new piece of equipment and use it for the entire business operation. However, when financial challenges arise, you can rent machinery for a limited time and pay less for its energy consumption and value. So, if your sector doesn’t require special apparatus, you can learn more about rental or hiring options that suit your needs at a certain moment.
Renting has numerous benefits, from being provided with access to amenities to avoiding maintenance costs and repair bills. On the other hand, you must be aware of the disadvantages. For example, renting for the long term is quite expensive and can be pricier than buying the machinery. Plus, renting has no ROI included, so make the investment with these aspects in mind.
Can’t keep up with expenses? Set up a budget system!
Setting up a budget system will help you considerably in keeping an eye on your purchases. Such a project should involve all company departments in the development process. Here’s what you may include for discussion:
Changes required from last year’s experience are vital to identify and use as a base for the budgeting system;
Priorities for the following year might also help shape the legal and financial framework of the company;
Opportunities for cutting costs can be established during the development stage, but the department should be open to improvements;
While budgeting implies you’ll have tight resources, you may try making it slightly flexible;
Can’t pay rent? Switch to hybrid or remote work!
Numerous companies are trying to get employees back to work in offices, but many have better results at home and can balance their work-life even with a hybrid model. So, if company rent is a struggle, why not allow your team to work from home a few days a week or even entirely?
The post-pandemic work method brought numerous benefits to employees, such as flexibility, saving money and caring for their health. At the same time, hybrid working ensures that people are getting just enough socialisation, so they’re not isolating themselves but also getting to work in peace and quiet. However, you must be wary of the risks of employees working long hours or being exposed to increased workload.
Need to minimise some expenses? Try sustainability!
If you’re still at the office but must lower the bills’ value, it would be great to introduce sustainability principles within the company. By improving your environmental performance, you’ll be able to reduce waste and save money.
You can start by monitoring the regular energy use of the company and see where improvements can be made. Then, look into sustainable and energy-efficient systems and equipment that will surely lower your costs significantly in the long term. If you’ve got the chance to get some financing, you can improve insulation in the building and replace lighting or heating systems with something less energy-consuming. Look for appliances with higher rates of environmentally friendly, such as A+++, but you can go even a little lower depending on the budget.
Want to be open to possibilities? Try AI!
Artificial Intelligence has been 2023’s best feature for businesses. It allowed a further improvement in efficiency and speed and reduced human error while being affordable for most companies. Of course, organisations should use AI with responsibility and transparency to provide genuine services and products to customers. Still, it’s a good idea to involve AI when it comes to repetitive tasks.
Implementing AI in your company means you have to get familiarised with the capabilities and limitations of this technology because it’s not that developed. You may already know that ChatGPT, for example, contains data sets only until 2021, which limits its ability to provide updated news.
Want to train employees? Try free skill development programs!
While cutting costs is essential for the company in times of financial struggles, the business must also improve and grow, otherwise, it will all go to waste. Therefore, to help your employees grow and absorb information, you can search for free development programs that target different skills and expertise so they can increase productivity levels and also be available for new and better projects.
While experienced people in business might not provide free programs, they can offer insight into what it means to expand a person’s view. Luckily, there are numerous events that aim to increase networking for certain audiences, but also online documents that can be used as a base for a business meeting. Regardless of what you choose as help, you should be open to ideas and allow employees to prioritise their input for better outcomes. You can also encourage them to take the task of self-improvement as essential for their careers.
Facing economic struggles in today’s world is difficult for both customers and businesses. Considering how fast trends change, as well as customer behaviours, keeping up with client’s needs is a real issue when you also have to maintain the company’s integrity and development.
So, what you can do is cut costs in a way that doesn’t affect employees negatively, meaning no layoffs. If you are able to keep your team together, you can implement the hybrid system, allow the business to evolve steadily and be prepared for any future challenge.
Image source: https://unsplash.com/photos/jpqyfK7GB4w