CUTTING COSTS: MAXIMISING RESULTS

Cost management is the process of planning and controlling the budget of a business. Cost management is a form of management accounting that allows a business to predict impending expenditures to help reduce the chance of going over budget.

Some of the strategies that any business can take to maximise the results without affecting the revenue and profit:

Increase productivity of your staff – recognise and reward staff contributions with staff performance reviews, and teach them sales skills and how to up-sell products so customers make multiple purchases at one time.

Increase your prices – check if you have priced your goods and services correctly and if you could increase prices without reducing sales

Develop new product lines – survey your customers about new products.

Price discounts – consider price discounts and promotions to increase your customer base.

Customer service – improve your customer service and develop a staff training program

Source new customers – new customers can help grow your business

Source new markets – use market research to determine if you could expand your business into new areas

Retail or Office displays – if any use effective retail displays to increase your sales

Decrease inventory – stock control is a good way to streamline your business.

Decrease direct costs – make sure you have the right suppliers for your business and negotiate for better prices or discounts for buying in bulk.

Decrease indirect costs – for example, try to minimise waste and errors in your business by training staff, or reduce marketing costs by using low-cost marketing techniques.

Decrease overheads – for example, save energy wherever possible or try find a cheaper energy supply company.

Benchmark key financials – bench-marking your business helps you compare your costs (like rent and utilities etc.) to similar businesses in your industry to see if you are paying too much.