The two guaranteed ways for a business to increase profitability: earn more money, and cut costs. In every area of business, from production to marketing, accounting to staffing, logistics to IT, there is the possibility to reduce expenditure. But the art of effectively cutting business costs is to gain the maximum profitability from doing so, while minimising the impact upon operations. What are some of the best approaches for doing so?
Cutting Energy Consumption
The need to “go green” is a preoccupation for many businesses today. Not just because it is the right thing to do, not just because it is what many environmentally-friendly customers and other stakeholders expect, but because cost-cutting often goes hand in hand with eco-friendly measures. The most obvious step, and sometimes the most easily achievable, is in reducing energy consumption. Quick-wins and low-hanging fruit might include switching to low-energy lightbulbs; bringing down thermostats by one or two degrees, or using the Nightwatchman solution from www.1e.com to remotely activate PCs when required, and returning them to low-power states when not. This is ideal for out-of-hours patching or routine maintenance for instance. The benefits of sustainability are manifold, and switched-on companies will not only implement green measures, but also trumpet them to consumers.
The Cloud
The scope for reducing costs through outsourcing is gigantic, in particular with the development of Cloud technologies. The inefficiency and waste often involved in server management is just one example. A major organisation can operate dozens or more servers for various functions, but this can be drastically reduced by placing data storage and suitable applications into the Cloud. It leads to reduced storage requirements, maintenance all handled by the provider, the ability to cope with spikes in usage, and everything available just as it was before - a no-brainer. There are security benefits as well particularly for SMEs with a limited budget for IT, and a predictable monthly cost at the end that helps financial planners.
Relocation, Relocation
The availability of virtual offices means that for many businesses, maintaining a prestigious address is now very affordable. A law firm, for example, might have as its correspondence address a virtual office in Temple, but base staff there only when face-to-face meetings are actually required. The flexible contracts will allow for meeting-room hire, telephone answering services and post-handling, at minimal cost. So the company itself could base itself some distance away in another part of the city or the country, massively saving on rent and commuting expenses, but still maintain a vital image for its suppliers and customers. As with remote working (below) this is a trend likely to experience a definite upswing over the next decade.
Smarter Marketing
Businesses looking to cut costs should pay close attention to their marketing efforts. Which streams really yield good results and which do not? Could the money spent on advertising campaigns in the press or elsewhere be saved by running it for next-to-nothing online? Social media has been a revolution in marketing, a resource that allows businesses to connect with millions of existing and potential customers, instantly, directly, and at virtually no cost. While social will no doubt remain a key focus for marketers in the years to come, there are many other ways to save with e-working and digital marketing. One simple example might be with newsletters, brochures or flyers, typically sent as physical copies by mail, but which can easily be sent online instead, and their impact better tracked.
Remote Working
Freeing up employees to work from home saves on desk-space, and has been proven to increase productivity, as well as job satisfaction. In any major company, there are multiple jobs that don’t necessarily require a physical presence on-site, especially now that technology allows the remote worker to access applications, shared projects, and company data, from their personal devices. Some businesses will also assist employees with commuting, another major saving which can be made. There are negatives involved too, such as problems with Wi-Fi or concerns that some staff may take advantage of their freedom. But the trend, globally and in the UK, is for remote working to increase massively.
