Many business owners too often focus on cutting costs, especially during slower economic times. What they should be doing is focussing on controlling costs, which will help run your business more efficiently and can (potentially) create a windfall when the economy rebounds.
Typically when costs are cut, quality and service are sacrificed and your customers suffer. As a result, you lose customers. Loss of customers equals loss of sales forcing you to cut more costs and creating a vicious downward spiral.
Controlling costs; sounds pretty easy, right? Wrong! Open up your checkbook or bookkeeping software and start with your biggest expenses, generally payroll, utilities, and rent. What can you do about these? You’ve already made lay-offs and neither JCP&L nor your landlord are willing to negotiate.
Payroll – Look at your staff. Are all of your hourly employees really necessary at the times when they are there? Can their shifts be staggered so that they overlap only during peak hours? Salaried employees’ time management can also be monitored. You may find that you only need one level of management rather than the 2 or 3 that you currently have.
Utilities – You are correct. JCP&L may not be willing to negotiate the rates but there are other ways to cut your utility bill(s) than just by slicing the rate(s). Look into installing motion sensor light controls, programmable thermostats, or even adjusting the hours that you are open. Keeping the lights on and your facility staffed during a time when not much is happening may be costing you $$. You could also work with the local utility company to perform an energy audit. In addition to the money saved, many of your customers will be thrilled to hear that you’ve “gone green”.
Some other ways to control costs:
- Investigate discounts available through any professional associations that you are members of
- Assess the services that you pay for. Can any be performed by your employees? Some may enjoy landscaping or cleaning and would welcome the opportunity to perform these tasks (most likely for less than an outside contractor). Forming a gardening club amoungst employees can not only save money but can build solidarity.
- Stay in discount hotels while traveling
- Compare airfares and car rentals
- Sublet any unsed space
If this becomes the culture in your organization, imagine the effect on the bottom line when the economy rebounds!