5 Tips for Streamlining Expenses

As the economy continues to languish, many companies continue to look for opportunities to shed costs without jeopardizing productivity, customer service, or quality. During an economic crisis, laying off employees is the first thing that many companies think of. Sometimes that is a necessary step, but here are five tips to take prior to cutting personnel:

1. Take a look at your assets-Do you own 50,000 square feet of warehouse space but can operate more efficiently out of 30,000 square feet? Find a tenant to lease that extra 20,000 feet or challenge your sales team to fill that space with revenue generating business. Do you have trucks or other equipment that are not fully utilized? Sell them and replace them with equipment that you can rent only for the peak times. Do you have additional furniture or computers in your facility that you do not use on a regular basis? Donate them to a local non-profit (and make sure that notify your local paper to get some great free publicity).
2. Review your telecommunications services-Telecommunications consultants can assist you in evaluating your company’s needs and matching the right services for you. Pay for voice, data, and wireless services that you actually need and use rather than the standard packages that are available. VOIP may be a cost effective way for you to handle your telephone system. Consider video conferencing periodically instead of traveling to each of your branches.
3. Use email instead of postage mail-Can you invoice your customers electronically? What about managing payments through your bank’s website? Eliminate the costs of ink, paper, envelopes, and postage. Plus, you will have the added bonus of electronic records of each transaction. Scanning a documents and attaching them to your email is another way to avoid postage.
4. Small parcel services-Are you using UPS, FedEx, or another small parcel service? Are you getting the best rates? Consider a cost comparison with the US Postal Service for items that you cannot email. Are you getting the best discount possible based on your shipping volume with your current supplier? Invite your salesperson to get you the maximum discount available for your organization. Also, are your employees in the habit of sending packages overnight rather than three day ground? Make three day ground shipping your default method and use priority overnight services only for those items that absolutely must arrive the next morning.
5. Audit services that your company uses-How much does that coffee service cost? What about the 5 gallon bottles of water for the cooler? Have your office cleaning service costs climbed but your office square footage remained the same? Has it been a year or more since you reviewed those services? You may be able to reduce your costs or eliminate unnecessary providers.
6. Renegotiate your lease-On your way to or from the office, take note of how many buildings there are available for sale or lease. Your landlord may be willing to reduce your monthly rent payment to keep you in your current space. You may also be able to get additional space at a lower cost by moving to a new location. Property management companies can sometimes offer free rent to offset moving expenses and may offer a custom build out at no additional charge.

Brainstorm other expense reduction ideas with your team. Bring in a group that includes sales, operational, warehouse, drivers, and administrative personnel. Tell them your goals (in dollars or as a percentage) for cost reductions. You will be amazed at the ideas that they generate. You will also reap the benefits of making your employees feel more included in the overall operation of your organization. As you implement their ideas, they will continue to come to you with additional ways to streamline your company.