A Manager's Guide to Controlling Costs and Boosting Profits
Written by Al Kraus
A manager has to tackle more jobs than people often realize. He or she can get stuck between dealing with customers and suppliers, handling lower level employees and pleasing upper management, so keeping day to day operations rolling can seem like more than a full time job. The best company managers know that their job isn’t just about managing various departments—they prove that they can also increase profits.
It’s no secret that the simplest way to increase profits is to reduce costs. By cutting costs you increase your profit margin. In addition, when you cut costs you can pass some of those savings on to your customers, resulting in more customers and (obviously) more profits.
Here are 12 profit-boosting, cost-controlling tips:
1. Negotiate with your suppliers for better prices. A good supplier will negotiate if you offer to buy in bigger bulk or for longer periods of time. Find a supplier who will get to know you.
2. It is always cheaper to advertise online than in traditional media. Rethink your advertising to take advantage of social media sites. This will not only cut your advertising costs it will also increase your revenue.
3. Renegotiate your lease. Landlords understand that a renegotiated lease is better than an empty space. If you own your space look at refinancing your mortgage.
4. If possible, consider switching to an office suite that shares copiers, meeting rooms, a receptionist and support staff.
5. Consider taking on a virtual assistant, letting employees work from home and using contract workers. In some cases you’ll save on benefits. You can also potentially downsize your space, allowing you to also save on utilities, give employees more flexibility and help save the planet by reducing your carbon footprint (and road rage).
6. Ask the professionals you utilize—especially your insurance agent—how to reduce business-related expenses. Often the best way to do this is to change insurance agents. Find someone who can bundle packages.
7. Switch to a cheaper Internet service and telephone provider. Often you can find these services bundled at a substantial savings. Make sure the quality is worth the savings. Your staff needs to be able to have great Internet and phone service to do their jobs.
8. Look into free business banking.
9. See if switching utility providers can save your company a significant amount of money. While utilities might not fall directly under your department, showing any overall savings for the company will look good for you.
10. Simply conserving energy translates into big savings. Install energy saving light bulbs and turn off copiers when not in use. These small actions may seem too insignificant to bother with but the savings add up.
11. Consider using computer equipment and software a little longer. It is no longer as essential to make costly and frequent IT updates as it was five years ago.
12. Get your employees to focus on a green/waste reduction mentality. See how much paper, ink and packaging can be reused, or switch to electronic transactions that do not need to be printed.
About the Author: Al Kraus is the Marketing Lead at Procurex Procurement Management & Solutions. Procurex plays a key role in providing manufacturing companies with overall profitability and growth through cost management consulting that can deliver sustainable operational efficiencies and secure a competitive advantage for your company.