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Cutting Costs to Keep More Cash

(August 2008) posted on Wed Aug 13, 2008

Trimingham describes how creatively reducing expenses can allow you to earn more in the long run and keep your valuable workforce on the payroll.


By Tom Trimingham

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Letting employees go is often the first thing that comes to mind when cost cutting comes up. Layoffs may work in the short term to help the bottom line, but eliminating the jobs of diligent employees can demoralize and overwhelm the remaining workers. Then, when things get busy again, you’ll lack quality staff and won’t be able to meet customer expectations. Fortunately, we have many other options to consider when we need to cut costs.

The simplest method, for starters, is to take a tour through the company that begins at the sales process and then follows through into the art department to uncover wastes of time and money. This needn’t be an exhausting procedure. You can focus on certain aspects of each area and profile those that are typically the most important so that the whole process can be more effective. An objective walk-through often pulls out the largest issues of waste and then spreads into the smaller causes that contribute to them. This method is best accomplished by first understanding the purpose and mentality behind cutting costs and then rolling this attitude into three divisions of a company’s process: lead generation, lead conversion, and product fulfillment in artwork.

 

The cost-cutting mentality

The first step in cost cutting is to organize everything into similar areas. The next is to prioritize and combine elements whenever possible. The final step is to properly stage each prioritized group in a flowing system of production.

Your profits will flow directly in proportion to the effectiveness and efficiency of your businesses system. This may sound great in theory, but putting it into practice can be a little more challenging. The easiest way to make headway in a task like this is to break down each area and then look for leaks or drags on the flow of the business process. A clear concept of system improvement is similar in a sense to improving the sorting and processing of information and products.

The reason for approaching cost cutting with this type of organizational mentality is that typically the largest barrier to reducing expenses is lack of systemized controls. Without a workable system in each area of a business, cutting costs in one area will often just spill extra workload into another and increase costs elsewhere. Focusing on efficiency and process will allow a far leaner system to operate smoothly.


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