How to reduce the cost of the right places and do more with less | Businessman

If you have a small business owner right now, you probably feel tension on the market. There is a huge press that will grow, serve your customers, pay their team and still keep a healthy margin against the background of the turbulent economy. At the same time, you know that you can only be blindly, because reducing bad things can get you to an even more difficult position.

Well, strategic cost reduction can actually make your business slimmer, more skilful and more scalable-and you may include peace of mind. Intoread of running your company from the site of fear, this time to re -rass as a way to rely on your business and build a String Foundation Foundation. You may be surprised at how much it will be as effective.

Related: 5 ways to reduce costs in your business

Understanding your cost is the first

Studies show that a large proportion of small businesses are not aware of their key expenditures. Before you cut something, it is important to delay and get a handle where your money really goes.

Work is usually large costs of small businesses. If you do not have clear information about King about your team’s time, it is now time to set them up. These king calculations may vary drastically depending on the role, so if you have KPI settings, take this time to examine them. If Don, we recommend working with a strategic financial specialist in their settings.

Long -term, look at your income at FTE (employed full -time) is a good place to start. That KPI should be closed to $ 500,000 for full -time employed. If you are coming under it, start looking at where you can redirect your time to you to knock or shorten working hours and costs.

Other expenses that are relatively easy to reduce are exhaust gases from external suppliers, unused rewards and travel. It is a wise practice when you review these expenses one by one, each month.

This kind of detailed financial review can be intimidating and stressful, but is absolutely important for survival slowing as a small business. By introducing this practice, you are now also creating a strong custom to be financially smart in your business.

Related: Don’t let 8 conventional expenses cover your growth and drain your profits

Given what and when to delegate

A common myth is that the delegation always saves you time, but that is not always played. It can become expensive, IFE, and any delegation you are currently doing is a second look.

When evaluating what you already delegate, you need to consider several things, or if you are considering newly delegating.

First, the delegation works best if you have already systematized what is handed over. If you first systematize, you delegate something that minimizes the cost of delegated work, so you maximize your king. It can look like inside your CRM or create a SOP for your handicapped practices.

Speaking of the king, consider the king of everything you pay to delegates. As an example, if cold outsourcing for cold, consider the cost of each call based on the hourly rate you pay and the number of meetings generated. This gives you an estimate of the cost permanently, which will help you understand the king of this investment. If you can invest money elsewhere in your business with a better return, it is time to move this investment.

Related: 8 unconventional ways to reduce costs in your business

Don’t cut where you can

Most businesses go wrong by reducing investments that actually support long -term growth, such as marketing, delivery support or team culture when they begin to feel financial stinging.

It is important to explore the king of every cost instead of panic. If your assistant saves you 10 hours at the weekend and you are using this time to close shops, it has its own. If the operation manager helps you maintain key customers, it’s a return. Create your best estimate of what this return is to help you make this comparison. For your assistant, count the value of the stores that have helped you close. For your manager, consider how many key customers they have helped sign again.

One of the effective ways to prevent this is to reinvest more to deliver clients for your existing customers than to grow. Ensuring that the client’s delivery is first -class can increase growth by creating fans who will go to you and have better maintaining your existing customers. This can provide you with a multilateral return on the same investment.

Despite the slowdown that many small businesses feel in real time, the goal is not just to survive at the moment. Rather, it is building a company that is efficient and slim. After the economy inevitably picked up, you have built an effective company on which it is being built and bent muscles regularly by tracking your finances and deciding on it.

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