Directions for cost optimization
Posted: Sun Dec 22, 2024 8:48 am
In the modern economy, cost optimization is becoming not just a desire, but a necessity for any business. Constantly growing competition, inflation and other economic factors force companies to look for new ways to reduce costs without compromising the quality of products or services.
Office space rental
A popular method of cost optimization is to reduce fixed costs in business in the form of rent payments. How to do this? Review the rented office, find a place with lower rent, perhaps smaller in square footage. Close retail outlets, if any, that do not bring in sufficient profit.
Office space rental
Source: shutterstock.com
Consider remote work. Some employees can work from taiwan business email list home, so there will be no need for a large space. Thanks to the development of digital technologies, if you do not have your own production, the need to store and transport goods, then almost any department of the company can be transferred to a remote work format. And this will lead to the fact that significant amounts of money that were previously spent on rent and utility bills are freed up.
Management costs
Review such a category of expenses as bonuses and employee bonus payments. This will be a completely working method of optimizing personnel costs.
Another item on this list is travel allowance. During the quarantine period due to the spread of coronavirus, many companies switched to working and conducting negotiations entirely from home. The modern world with its technical innovations makes this format of contacts accessible and convenient for most companies.
Increase Profits by 200%: Download 5 Powerful Tools for Free
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you the 5 most valuable documents that we have developed for our clients.
Download for free and implement today:
How to find out the 5 key marketing metrics in your company?
Step-by-step calculation template with fields where you can insert your data
How to make a KPI for a sales manager based on his work results?
Current template for calculating KPI for sales manager
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
Cold Lead Processing Script Template
A checklist of ready-made questions for engaging cold clients
7 Profitable Marketing Strategies Examples
Will help increase customer flow by at least 30%
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153115
Production costs
You can draw up a cost optimization plan that includes common methods.
For starters, you can use lean manufacturing technologies, which have proven their value in practice. But you will have to wait for the results, as this is a long-term job. Its essence lies in the gradual reduction of such actions in production that lead to losses and low efficiency.
At the same time, there is an optimization of expenses due to new equipment at the enterprise. Thus, all resources will be used much more efficiently, it will be possible to more conveniently control the process, reduce energy consumption.
Production costs
Source: shutterstock.com
If you are implementing a reduction in the cost of raw materials in production, then you need to think about how not to lose the quality of the product itself, but at least maintain it at the same level or improve it. Otherwise, you may lose a significant part of your customer base, which is extremely dangerous for business during periods of crisis.
At the same time, it is necessary to think about how to account for and use production waste. The solution to this issue will help to minimize the budget allocated for their storage and disposal, because sometimes these costs are comparable to the price of the product itself.
Quality control
The method of optimizing financial expenses by reducing quality control costs seems to be a difficult task. Two conditional groups can be distinguished in these costs:
mandatory expenses;
expenses that can be avoided.
The latter group includes:
production waste, including returnable waste;
work on defects, as well as the costs that are required in the form of materials, time resources and other resources;
budget for checking the quality of goods (given that the approximate average data on the number of defects in production already exists);
funds allocated for additional obligations, such as warranty and after-sales service;
irrelevant goods and services that are in low demand among consumers.
Expenses that cannot be excluded are those necessary to maintain the proper quality of the products manufactured at the enterprise, as well as to minimize defective units. The budget for this category of expenses is subordinated to a specific action plan:
audit and use of the quality monitoring and control system;
monitoring of all processes and maintenance of equipment;
audit of supplier counterparties;
conducting training for employees who are responsible for maintaining quality at the proper level;
checking and monitoring product characteristics according to esta
Office space rental
A popular method of cost optimization is to reduce fixed costs in business in the form of rent payments. How to do this? Review the rented office, find a place with lower rent, perhaps smaller in square footage. Close retail outlets, if any, that do not bring in sufficient profit.
Office space rental
Source: shutterstock.com
Consider remote work. Some employees can work from taiwan business email list home, so there will be no need for a large space. Thanks to the development of digital technologies, if you do not have your own production, the need to store and transport goods, then almost any department of the company can be transferred to a remote work format. And this will lead to the fact that significant amounts of money that were previously spent on rent and utility bills are freed up.
Management costs
Review such a category of expenses as bonuses and employee bonus payments. This will be a completely working method of optimizing personnel costs.
Another item on this list is travel allowance. During the quarantine period due to the spread of coronavirus, many companies switched to working and conducting negotiations entirely from home. The modern world with its technical innovations makes this format of contacts accessible and convenient for most companies.
Increase Profits by 200%: Download 5 Powerful Tools for Free
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you the 5 most valuable documents that we have developed for our clients.
Download for free and implement today:
How to find out the 5 key marketing metrics in your company?
Step-by-step calculation template with fields where you can insert your data
How to make a KPI for a sales manager based on his work results?
Current template for calculating KPI for sales manager
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
Cold Lead Processing Script Template
A checklist of ready-made questions for engaging cold clients
7 Profitable Marketing Strategies Examples
Will help increase customer flow by at least 30%
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153115
Production costs
You can draw up a cost optimization plan that includes common methods.
For starters, you can use lean manufacturing technologies, which have proven their value in practice. But you will have to wait for the results, as this is a long-term job. Its essence lies in the gradual reduction of such actions in production that lead to losses and low efficiency.
At the same time, there is an optimization of expenses due to new equipment at the enterprise. Thus, all resources will be used much more efficiently, it will be possible to more conveniently control the process, reduce energy consumption.
Production costs
Source: shutterstock.com
If you are implementing a reduction in the cost of raw materials in production, then you need to think about how not to lose the quality of the product itself, but at least maintain it at the same level or improve it. Otherwise, you may lose a significant part of your customer base, which is extremely dangerous for business during periods of crisis.
At the same time, it is necessary to think about how to account for and use production waste. The solution to this issue will help to minimize the budget allocated for their storage and disposal, because sometimes these costs are comparable to the price of the product itself.
Quality control
The method of optimizing financial expenses by reducing quality control costs seems to be a difficult task. Two conditional groups can be distinguished in these costs:
mandatory expenses;
expenses that can be avoided.
The latter group includes:
production waste, including returnable waste;
work on defects, as well as the costs that are required in the form of materials, time resources and other resources;
budget for checking the quality of goods (given that the approximate average data on the number of defects in production already exists);
funds allocated for additional obligations, such as warranty and after-sales service;
irrelevant goods and services that are in low demand among consumers.
Expenses that cannot be excluded are those necessary to maintain the proper quality of the products manufactured at the enterprise, as well as to minimize defective units. The budget for this category of expenses is subordinated to a specific action plan:
audit and use of the quality monitoring and control system;
monitoring of all processes and maintenance of equipment;
audit of supplier counterparties;
conducting training for employees who are responsible for maintaining quality at the proper level;
checking and monitoring product characteristics according to esta