With the all the increases taking place and more and more people having to save money where ever they can, it’s no wonder that business are using creative cost cutting methods. If you’re a business owner looking for another way to pinch some pennies, perhaps you can get some ideas here.
We spoke in a previous blog about how an American airline took just one olive out of their in-flight salads and it saved them thousands annually but did you know that Canon, famous for their cameras, saved over $50,000 using recycled furniture when it expanded an office while Xerox created an “adopt a plant” programme where staff water the plants instead of a watering service, saving $200 000 a year.
American Standard plant in Tyler, Texas, saves $70 000 a year by vacuuming the doormats in the entrance ways instead of sending them for cleaning and Time Inc. has folded its 60-year-old in-house newsletter FYI again saving thousands of dollars.
Moira Vetter a writer for Forbes magazine highlights the fact if you “spend a little more time ‘scrutinizing the salad,’ you’ll likely find hundreds in fat that weigh your business down by reducing capital.
“There’s an old adage that there are stumps and garbage at the bottom of a pond, but no one sees them when the water is rising. When the water—or the cash—starts to dry up, it makes it far more obvious as to where the problems are. Take time regularly, especially in good times, to look for areas to save and improve efficiencies.”
In addition, Vetter speaks about focussing on the 80/20 Pareto Principle where 80% of the costs go to 20% of the line items. Regular review of your 5 to 10 biggest recurring expenditures provides you with a quick identification of inefficient practices which you can work on eliminating.
Vetter adds: “If you’re in a labour-intensive service business a huge part of your monthly expenses are salaries or contract labour. I’ve worked for companies that had 90% of their capital locked up in labour costs. If you operate this sort of model, it is critical that you understand who your most productive and profitable employees are.
If you are involved in a materials intensive business then look at the delivery costs of these and see where you can save. Renegotiate with your suppliers, find a new one or even look to brining the courier services in-house.
These of course are just a handful of ideas, but in every business there are ways to save, all it takes is a little time and scrutinising of where the money goes.