Auditel Consultant:
R&PB Consulting LLP

IoD’s suggested cost cutting

27 Sep 2009 | Filed under: Why appoint Auditel

Posted by Steve Ray

The following are 10 suggestions from the IoD for cost cutting in your business. We particularly like point 9 because at Auditel this would be our preferred way of working – we are very happy only to be paid according to our effectiveness & results.
We prefer to think of it as proper management of costs rather than “cost cutting”.
The IoD’s suggestions are:-

10 ways to cut costs

Coins

1 Keep staff on board

Cost-cutting measures are often unpopular, but when staff understand that their jobs may depend on them, they’ll play along.

2 Improve business forecasting

When you have a clearer picture of future trading conditions, you can make more reliable resourcing decisions, on everything from staff levels to materials and marketing spend.

3 Analyse spending

Map outlay on goods and services along a horizontal axis and criticality of purchases up a vertical axis. Divide box into four quadrants. Focus on purchases that fall into the top right-hand quadrant.

4 Review utility costs

Typically, these represent the second- or third-biggest single controllable cost. Shop around to cut utility charges.

5 Control business travel

Some journeys aren’t really needed. Look at the purpose of long trips and whether you can get what you need another way, through a videoconference or webcam meeting, for example.

6 Cut the cost of debt

It’s excessive (and sometimes expensive) debt that sinks many businesses. Look at reducing the cost of debt by an injection of equity.

7 Automate routine processes

Provide more information on your website. Ask customers to order online.

8 Explore offshore manufacturing

Consider whether all or parts of your products can be manufactured in the Far East or eastern Europe.

9 Use consultants sparingly

Sometimes they save you money-more often, they cost. Consider asking them to work on a contingency basis.

10 Cut directors’ perks

It’s tough to start at the top, but it sets the right example to the rest of the company.