Virtually every business has ongoing operating costs. And while it may be possible to keep your costs low by working virtually, this option simply isn’t available to every business. It may not be for yours: You may need a physical space and full-time workers.

And as your workforce and need for space grow, you may have no choice but to expand, move to a larger office space or rent additional storage and space.

Still, even if you can’t go 100 percent virtual, there are, fortunately, ways of optimising and reducing operational costs. Here are four strategies.

 

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Outsource

Many businesses outsource tasks to be handled by an outside contractor or team. Since you can outsource tasks to skilled workers across the globe, you can save on labor and still get quality work delivered.

Outsourcing can also take the form of managed services and customised office or filing solutions for businesses.

Fileminders has helped many companies organise and manage their sensitive records and documents. For example, according to a case study about Hellenic Bank, the bank was suffering from a lack of space due to an overflow of records.

Fileminders helps the organisation to relocate and index documents; to develop a shredding solution to avoid the theft of sensitive information; to digitise its documents, and to implement document-management software.

Outsourcing isn’t always as straightforward as it sounds. You still need to find good talent and cultural fit, just as you would do when building your in-house team. If you’re serious about outsourcing to reduce costs, do your due diligence and find qualified individuals or firms to work with.

Put in systems

Some businesses lack clearly defined processes that enable them to run more efficiently. The consequences can be substantial. In most of these cases, business owners end up spending more on employees.

They hire more employees than they need. The employees make mistakes in their work because of a lack of established protocol and they defer all questions to the business owner, even if they’ve personally handled those problems before.

Meanwhile, you could be running a leaner operation if you had processes and procedures your team members could follow.

Take the example of Patrick Campbell, co-founder, and CEO of Price Intelligently. According to his account on the company website, he built a business that earns millions of dollars annually with help from a small team, and he credits his success to his implementation of more processes and systems in his business.

Although systems need to be continually updated and refined, they can reduce the amount of time spent on training and onboarding and increase a team’s overall productivity. The counterintuitive part is that you must spend time developing these systems, which itself can take time away from business development and serving clients short-term.

That is a temporary sacrifice, but oftentimes a necessary one if you have any intention of growing and scaling your business down the line. Additionally, if you are planning to outsource work to virtual assistants and contractors, systems are a must.

Automate

Automation sometimes works hand in hand with systemisation, since making your business more efficient may require the use of SaaS apps and other technology. This technology allows you to do more with less manual involvement, which also means you can redirect your resources towards more high-level, profitable activity.

A Canadian airline company, Canadian North, for instance, utilised EchoVera’s AP Automation solution to automate its processing of supplier invoices – to the tune of $300 million per year according to EchoVera. This led to significant cost savings.

Technology can help you reduce your workload or make procedures more efficient, but there are a few things to keep in mind.

First, you will need to do some shopping around. Not every solution will be the right one for your company, and you could easily end up spending more on a piece of software that may not even be the best fit for what you’re trying to accomplish. Don’t be fooled by flashy presentations. Understand your needs and always look for a good fit.

Second, it may be possible to negotiate with vendors to reduce costs. If you’re paying per use, for instance, and you know how many times you use the service in any given month, you could ask to see if the vendor would be willing to offer you a package deal so you don’t have to pay the same price for every use.

Third, less is often more. You’ll want to cancel unneeded services regularly. Having more tools increases the complexity of your operations, so fewer may be better. You may even find all-in-one solutions that serve multiple needs instead of just one.

 

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