Being in management means you have to balance the needs of individual employees with what's good for the wider business. This can often be a delicate task that requires a lot of thought and attention.
Often one of the biggest areas where companies feel this pressure is when it comes to cutting costs. You don't want to do anything that may jeopardize your employee morale or damage your incoming revenue, but you do need to reduce expenditure where possible to make the most of your investments.
So how can you reduce your business losses?
1. Regularly review your costs
Having somewhere where all your outgoings are kept can allow you to keep a close eye on what you're spending and where your money is going. Regularly looking at these figures can help you to achieve a good overview of your expenses, but also allows you to see if something is significantly off for a certain month. This means you can go in and check what's caused the issue before it gets chance to repeat itself or severely damage your cash flow.
It's important to schedule a regular slot in your calendar for either doing your finances or, if you have a specialist team, talking to them about the current situation. This allows you to keep your finger on the pulse of the company's finances without having to dedicate all your time to it.
2. Look at the vendors you're using
It's likely that you rely on a number of third-party companies to keep your business running. From internet providers to software licenses, most businesses have to pay a certain amount out each month to enable them to deliver their service to customers. It's important that you regularly check the amount you're spending and whether your needs are still the same.
As staff leave or your company changes, your demand for certain products may shift. This means you could be spending way too much money on licenses or internet usage when you don't need to be.
3. Double check expenses
Employees are usually honest about expenses, but it's always good to do spot checks or liaise with your finance team to ensure everything is above board. It's also wise to evaluate how much these expenses are costing the company and whether you're getting a good enough return on investment (ROI).
For example, if you're going to meet with clients but rarely get anything substantial out of it or they often cancel, it makes sense to stop. Instead, extend the invitation to your office and say you'd like them to meet the team. This way, the cost of travel is on them if they cancel.
4. Don't stay loyal
Whether it's your business bank account, internet provider or software subscriptions, staying loyal to one company rarely pays off. Keep an eye out for the offers that may be around and use this as leverage to negotiate with the businesses you use. Most will want to give you an incentive to stay with them, potentially giving you considerable savings. If they don't, you can move to the other provider and save your company money that way instead.