Reduction – Straight to the beginning of the line

Costs, prices, and sales volume in any business that dramatically improves cash flow and profit. In this series, there are articles on improving price and sales volume, but cost control is a continuous internal issue that every college needs to involve.

Ask your accountant to produce a table of all cost categories. Let's look at just three things: IT, cleaning, raw materials.

Create a spreadsheet for each of the three items in the last year. Now involve your colleagues in creative thinking so that each one can reduce one category by only 1%. Anyone can achieve 1% improvement, but if they asked for 10% improvement, everyone would say it's impossible. But a lot of cost reduction of 1% quickly absorbs 10%. This is extra cash straight to your profit.

Let's start with IT. How much is to be fitted? A monochrome laser printer would be more cost effective than color inkjet or laser document creation. Data can be stored in the cloud, rather than on its own servers. Let the Cloud service providers run the virus check, so there is no need for your home IT staff, if so, would it be cheaper to rent on a ground alone?

Create a Bubble Map from any idea your staff is creating, then pick out instant winning ideas and instantly make these cost savings.

Similarly to your office cleaning account when you last negotiated a cleaning contract or asking for other quotes.

If you are a manufacturer, your raw material costs are likely to be reviewed continuously. But summon the production staff to an ingenious session in the morning on how to reduce debris by only 1%. I did this once on three plastic extrusion lines and have put hundreds of ideas to increase efficiency. Remember all the ideas and then start the simplest to show some quick hits. It encourages everyone to continue to work on more difficult cost-cutting challenges.

If you invite your colleagues to come up with ideas to save 1% of their costs, improve their prices by 1%, and sales volume by 1%, then profit can improve by 10%. Everyone is able to improve at least 1% of at least one of the variables.

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