Cost control is at the centre of your business success
TacticalBusiness Solutions specializes in helping you with cost control. This can be a misunderstood area of business as business owners tend to either avoid it, or implement cost control in a reactive way. With the right planning and systems, cost control can turn your business around.
We work with you to:
- Identify your major cost centres
- Differentiate between kinds of costs (short term, long term, operational)
- Identify where you can eradicate and/or diminish costs
- Differentiate between projected, actual and ideal costs
- Learn how to track costs
- Anticipate unexpected costs
- Contain unforeseen costs
- Implement regular cost control reviews
The two main ways to implement effective cost control are:
- Eliminate what is unnecessary and/or inefficient
- Improve systems for optimum performance
Jumping too fast into either area can end up costing you more
Slashing costs is rarely good business practice. Cost control is not about compromising on quality. So while it may seem like a good idea to replace senior practitioners with inexperienced juniors who will work at half the rate, you may be better off introducing a mentor system where seniors are training guiding juniors, ups-killing them more quickly.
The same goes for any decision that will impact your staff or customers. Reducing quality may lead to dissatisfaction. Good cost control is about eliminating excessive and unnecessary costs, not getting rid of cost all together.
Examples of unnecessary or excessive costs include:
- Leaving computers, lights and other electric items on when not being used (especially overnight)
- Excessive luxury travel
- Excessive post or mail costs (when electronic transmissions are sufficient)
- Irrational or ad-hoc purchase and/or ordering systems
Similarly, be careful of introducing new systems that may have hidden costs. An example of this is jumping onto a new CRM system or other software package, without consulting staff or giving them sufficient training. Productivity goes down and if you need to be getting IT consultants in to fix too many teething problems, this move can cost you a lot more than it saves.
Ways to improve systems and reduce costs can include:
- Improving payroll systems
- Rationalizing suppliers
- Review quality control processes
- Review your finances and financial systems