What is Your Cost Reduction Plan?

Do you have one?

When I worked at a FTSE Top 10 one of our 3 objectives was to reduce costs annually by 4%. Why 4%?

Who knows, but that was the number. But the point is, it was one of 3 corporate objectives and so it was always front of mind.

Anyone who runs a business knows how easy it is to let costs spiral especially when its your team spending your money. (I hope you still sign all the cheques!)

Whilst working with a client this week they now have a corporate goal to deliver 25% savings in production costs through efficiencies and waste reduction. Better still they have a plan to achieve those cost savings!

That’s a huge boost to their bottom line.

One great place to start is to reduce expenses, especially those you’ve been paying for a while. Here’s my headline cost control checklist:

• Office costs
• Property Costs
• Component costs
• Managed services
• Logistics
• Vehicle costs
• Banking, finance & Insurance
• Professional fees
• Salaries and bonuses.

This is an easy way to identify cost reduction opportunities but why only do half a job?

Make sure it sits alongside a buy better strategy.

Both should form part of your cost reduction plan. But the one thing you can do today to make sure you’re getting the most from your spend is to personally approve every penny spent!

Did you read my More Money guide which focused on finding an extra £50K in your business?