Successful businesses typically take a two-pronged approach to growing their companies: increasing revenue and reducing expenses. Granted, increasing revenue through new innovations, clients and sales tends to get the blood pumping more, but it can be counterproductive to focus on revenue growth when you’re siphoning away your successes by not controlling your expenses effectively enough. So, here are ways in which you can control expenses.
First, we took a look at a great article by Steve Odland in Forbes.com. He first focuses on contracts, noting that many American businesses prefer signing multi-year contracts – but, in fact, you can often save money by negotiating all of your contracts annually. This causes you to review each one at least once a year, having a conversation with your vendors that could lead to reduced costs.
He also suggests having an annual planning session with customers. Now, you might already do something like this on the revenue side, seeing what other products and services your clients might need. But, savvy customers can often provide outstanding insights into cost reductions, perhaps by sharing a clunky part of your process that should be streamlined because, “talking about how to jointly improve business deepens the relationship, shows them you care, and helps reduce costs for both parties.”
Another article, 8 Key Budgeting Tips for Your Management Team, offers additional expense cutting tips, including:
• A reminder: the goal of a budget is not to create an “immovable object” or even to correctly predict results. Instead, it’s a guideline to follow. “If you try to forecast every little expense, the detail will drive you crazy.”
• Making tradeoffs whenever they make sense; if you really should spend money on something important that arose but is not budgeted, do it! Then trim back another budget item to make room.
• Having cash flow targets because “every year businesses with smashing profit pictures go out of business for lack of cash.”
For more than 20 years, we’ve been developing customized telecom cost reduction strategies for companies to save them money. Our initial approach looks like this:
• evaluating/determining the root cause
• developing resolution scenarios
• creating implementation strategies
• creating fall back strategies
We’ve also expanded into additional expense reduction services, including these:
• Credit card audit services
• Utility bill auditing
• Employee benefits consulting
• Waste management audit
• Workers compensation audit
Here’s the bottom line: You want and need a solid bottom line, and increasing revenue is only one prong of the two-prong approach used by successful companies. When you choose us as your expense reduction consultant, you’re creating a key part of your winning strategy. You can also call us at 888-692-5111.