#WednesdayWisdom - 6 Ways of Reducing Expenses

1. The first step is to make a plan. You need to evaluate where your business is now and where you want to take it in the future. Base on this you work on your forecast-budget.

2. Keep a good track of your expenses. It is important to understand the historic costs before planning and gather data in a effective and efficient way.

3. Benchmark against your industry. Establish metrics that are meaningful to your business and comparable to those used by other companies in your industry.

4. Analyse your Fix Costs. People tend to become complacent about fixed costs because they are generally recurrent but we should go through then on regular basis. Making sure we still need those services and that it is a fair price (get quotes from other suppliers – negotiate your current supplier conditions).

5. Manage your Variable Costs. Look at your company’s past variable expenses and calculate what percentage of sales they represent. Historic percentages provide both a good indictor of potential future costs and a benchmark to use in keeping those costs in line with selling activity.

6. Invest in technology. Consider using new technologies that may help your business by improving efficiency and increasing productivity.

 

If you need guidence to go through this exercise please get in touch.