Business News of Friday, 4 August 2017
Source: Devtraco Plus
Cost is the amount of money that has to be issued out or paid for something to be produced or achieved.
In business, the cost is most of the times a monetary valuation of effort, material, resources, risks incurred, time and utilities consumed and the opportunity forgone in the production and delivery of a product or service.
Small businesses often work on constricted margins, hence the need to make sure they achieve higher margins in order not to make losses. There are two ways to achieve higher margins, either to increase the revenue or to reduce your expenses.
Here are five ways of cost reduction that companies can take advantage of without compromising on quality work.
The world, in general, has changed and is growing faster due to technology. The business world, in particular, has also adapted this change briskly and is keeping up with the latest development, especially now that more companies are geared towards doing more with fewer resources. It is important to take a look at your current administrative process and point out areas that could be automated using technology instead of man power. There are definite online solutions that can automate various business functions at a fraction of the cost involved in employing human resources. This can really help employees to prioritize their tasks, and in the long run, improve business productivity.
Strategically outsourcing secondary business activities is an astute way of cutting down cost; operational cost. This ensures that the business is well trimmed and also reducing pay roll costs. These activities obviously have to those that not of high priority in order to allow you to focus on the most important and revenue generating tasks. One way to determine if a task is of high priority is by asking the question, “which of these requires a full-time employee”
Make Smart Hiring Decisions
You can reduce your yearly expenditure on human resources by employing people with multiple skills. If your receptionist knows a thing or two about marketing or content marketing then that’s a plus for your business. Another way of doing this is by hiring independent contractors, especially those that work from home. You won’t need additional space to accommodate these workers and you won’t have to deal with the expenses of dealing with these workers. With this, it is important you are well versed with the laws and regulations of dealing with contractors in order not to find yourself in any legal trouble.
If in a particular period, your business has slowed down, to a point where you are very certain you need fewer employees, then there is the need to take a smart decision because you definitely do not need that office space and much less paying for that space month on month. Subleasing that space to another small company or a department of a company will do your business a lot of good because by doing so, you are definitely cutting down cost.
With these tips from Devtraco Plus, you can take your business to the next level. Let the entrepreneurial spirit in you fly!