50 Ways to Save Money

There are countless ways to save your business money. Unfortunately, many Australian businesses are overlooking them, or simply don't have the time to go searching them out.

Buyer's remorse is not a new idea. You may have experienced it right after a friend revealed he'd paid $100 less for his state-of-the-art golf clubs than you did. But what's $100 between friends? Better luck next time, you think.

Now consider how you'd feel if the same friend told you he was saving $100,000 a year on running costs for his business. Suddenly, buyer's remorse takes on a much more serious face.

Cost cutting may not be glamorous, but it is vital to ensure the stability and progress of every business in today's competitive world. Fortunately, you don't have to do it by yourself. There are consultants, such as Expense Reduction Analysts (ERA), available to help you manage costs. They scrutinise the 'little things' that are often overlooked, and yet add up to big costs - things like stationery, printing, telecommunications, couriers...you get the picture. Once scrutinised, they offer a solution tailor-made to that company.

"Our clients always make the decisions about which alternatives are most suitable for them, and are included in the process all the way through," says Fred Marfleet, Chairman of ERA Australia. "But our help and guidance ensures they make the right decisions."

To give you an idea of the kinds of things that a company like ERA takes into consideration when investigating a cost-management solution, we've put together a list of 50 ways in which your company might cut costs.

Starting with the big picture

1. Centralise purchasing

You may be buying the same goods from different suppliers! Coordinate the spending of different departments to maximise discounts through bulk purchasing power.

2. Cut the paperwork

Request monthly consolidated invoices to improve cash flow and reduce administration costs.

3. Ask for a reason

Don't accept a price increase without challenge.

4. Get a second opinion

Obtain alternative quotes - on everything. Advise existing suppliers that the business is being tendered, and give them a chance to reduce their prices.

5. Call in a negotiator

Never allow the person in daily contact with a supplier to negotiate price. Use the good cop/bad cop approach, calling in someone else, so that emotion is not involved in the process. This also allows the day-to-day relationship to remain unaffected.

6. A beautiful friendship

Building good relationships with suppliers can result in reductions in costs. Ask them for suggestions on how to improve the way in which you work together. Could ordering weekly instead of daily allow them to reduce their own admin costs and enable them to pass the savings on?

7. Improve cash flow

Reduce your stock levels, and encourage suppliers to hold stock.

8. Review product specification

Ensure that products being used do not exceed requirements. Can you use second-hand pallets for transportation? Recycled toner cartridges?

9. Establish a caring culture

Caring is a pre-requisite to effective cost-management. If staff and executives are complacent, it's difficult to implement savings.

10. Commit to stamping out unnecessary costs

Lead by example and demonstrate to employees that you care about saving money, even on the smallest items.

And now for the detail...

11. Advertising

Don't just take their word for it: conduct regular research to ensure that your advertising budgets are being used effectively.

12. About the creative...

Remember that outstanding advertising creative work generally costs no more than ordinary creative. Having said that, ensure that you are not funding the creation of campaigns that win awards, but do not sell your product!

13. Bank charges

Review them regularly - at least once a quarter. Ask your bank manager to suggest ways in which you could reduce them.

14. Competitive banking

While it's easy to be complacent and leave all your banking in the hands of one institution, it pays to shop around. Many banks specialise in different areas of expertise, and you can use that knowledge to serve your needs - and save you money. Plus, you won't be fully dependent on one bank!

15. Challenge the manager

When you receive the statement of charges from your bank, take five minutes to consider ways in which the bank has added value to your business. Challenge the bank manager to come up with five himself - and ask yourself whether his list justifies the charges.

16. Cleaning

Ask your staff regularly whether cleaning services are meeting their requirements.

17. Communicate your needs

To ensure your cleaning contract - or, in fact, any contract, meets your needs, make sure the contractor knows what you expect. Let them know if there is a problem - but also give them feedback if things are going well.

18. Couriers #1

Understand how your couriers charge their clients. Some charge per consignment, others per parcel. Work out which service will be most effective for you and, if necessary, switch suppliers.

19. Couriers #2

What's your courier company's specialty when it comes to service? Some specialise in overnight delivery, other in international distribution. Use the courier that is most appropriate for the job, as this will be most cost-effective.

20. Couriers #3

Planning can add up to big cost reductions in this area. Timed deliveries are significantly more expensive than next-day deliveries. How soon does it really need to be there?

21. Couriers #4

If you help your courier company by minimising collection and waiting time, you become a more 'attractive' account, which can be a good negotiating factor.

22. Couriers #5

Look at instigating standard daily courier runs, which can be negotiated over and above the rate card.

23. Expiry can be expensive

Be aware of the expiry date on contracts for services such as electricity, gas, and phone. Suppliers often revert to a much higher penalty rate once the contract expires.

24. Freight costs

Consider handling costs and packing when putting together a consignment. Does it fill one container, or is it made up of several items that can be packed on pallets so that you can minimise transport handling costs and stock damage?

25. Investigate insurance

Allow time to investigate and negotiate your insurance policy before the renewal deadline. Make a note of when policies are due - many brokers wait until so close to the renewal date to contact their clients that they leave little time for negotiation.

26. Know your insurance needs

Have you worked out the latest level of cover you need? Is it more or less than last year? Can you cut out brokers, have your policy repackaged, or cap excesses?

27. Making space

Do not allocate a specific car park to a specific staff member. Have seven per cent fewer car parks than the number of staff entitled to them. On any day, you'll find that there will be a certain number of absentees - you don't need to pay for empty spaces.

28. Making the most of fuel cards

Have you reviewed your fuel card system? While most oil companies offer rebates, they do not do so in a directly comparable manner. Some will offer a rebate off the pump price, others choose different bases (eg, area averages) from which to make their rebate. Research will show which will work best for you.

29. Owning the office equipment

Take into consideration the total cost of ownership of your office equipment for the full life of each machine. Consider not only present needs, but future ones, before you purchase new equipment. Will new equipment offer a better, alternative way of doing things?

30. Office supplies #1

Decide on a comprehensive product range and stick to it. Be wary of 'stationery cupboards'. While they may seem an easy way to deal with this 'chore' item, they cede control of the ordering and stocking to the stationery company.

31. Office supplies #2

Try suppliers' own-brand products. This can reduce costs by up to 40 per cent.

32. Order it back

Request that all staff hand back the unused items of stationery lurking in their desks. You may find that you do not need to re-order for many months!

33. Packaging #1

Standard cartons are much more cost-effective than special-sized ones.

34. Packaging #2

Review your packaging - invite suppliers to make recommendations for cost reduction.

35. Packaging #3

Printed cartons are expensive. Consider using plain ones, and sealing with printed tape instead.

36. Pesty business

Check the hours agreed for pest control services. If the supplier is charging more for after-hours service but using safe chemicals, it may not be necessary to have the services delivered when your offices are closed.

37. Pesty charges

Examine the charges from suppliers who have been in place for some years. Look out for them posting increases without changes in service specification.

38. Postage #1

Clean up your database to reduce returned mail and coordinate your marketing mail-outs to exceed threshold quantities.

39. Postage #2

Investigate alternate methods of information delivery. It may be that your message can be delivered via an alternate method to conventional mail (eg email), and there are companies that specialise in distribution methods to suit your preferences.

40. Printing #1

Do you really need printed envelopes, when plain might do just as well?

41. Printing #2

Always use standard paper sizes.

42. Printing #3

Order larger quantities at one time, but don't get caught out. If you only need 7000 brochures, it's still cheaper to order that number at $3.30 per unit than it is to pay for 10,000 at $2.80. Companies over-order to get the price down and then don't use the stock!

43. Printing #4

One way to get the best out of volume-sensitive ordering is to print the items that require the same paper stock at the same time.

44. Records management

Don't continue to pay for the storage of boxes simply because you haven't worked out whether you need to keep them. Review!

45. Telecommunications #1

Be aware of flag falls or connection fees per call, and your call duration, when assessing telecommunications contracts. Most businesses have low call durations, which means the flag fall is a large part of the cost of the call.

46. Telecommunications #2

Treat loyalty discounts with caution. They usually apply to eligible calls only and amount to very little on your total bill. Check the fine print.

47. Telecommunications #3

Have you achieved any real savings on your phone bills over the past 12 months? How many lines do you really need? Asking yourself some questions can save you a lot of money.

48. Travelling light

Savings can be found in managing your travel well. Avoid last-minute bookings - you can save more than 30 per cent by booking weeks, not days, in advance.

49. Travelling often

If you or your staff are using a lot of hotel rooms, look at negotiating a better rate with one hotel chain.

50. Workers Compensation

Be aware of the rollover date on your workers comp insurance. The time to review the level of premium is before it falls due, not afterwards!

Making real changes

There's a lot of food for thought in our list, but even more in this fact: experts estimate that 90 per cent of Australian businesses are overspending on day-to-day expenses - by as much as 75 per cent! Are you one of them? ERA suggests that if you answer 'yes' to any of the following, there's a good chance that you can reduce business operating costs and free up profits.

Do you have a centralised purchasing system with each department having its own favourite suppliers and its own purchasing processes?

Do you always seem to be purchasing in an ad-hoc, as-needs manner?

Do you seem to stick to the same supplier and trust that they're giving us value for money?

Got a yes or two in there? Don't be disheartened. In fact, look at the positives: chances are there's heaps of money to be saved within your company. Give ERA a call to find out how - and how much! ERA is an independent cost management consultancy and works on a 'no savings, no fee' premise. If they don't find any savings for you, you pay nothing. You have nothing to lose - except a lot of unnecessary costs!

To find out more visit www.expense-reduction.com.au or call +612 9922 7999

Fred Marfleet is Chairman of Expense Reduction Analysts Australia, a global franchised cost management consulting group. More details can be found at http://www.expense-reduction.net

---

Provide Affordable Health Care To Employees At Little To No Cost To You

You can provide affordable health care plans to your employees.... Read More

How the Crab Effect Obstructs Growth and How to Conquer It

Some of the greatest words of wisdom for any man... Read More

Creating Lists to Learn About Yourself, Your Business and Your Customers

I love lists. I make them for everything. And I'm... Read More

Franchising Companies Relationship Strategies

Franchising Corporations need to maintain an iron fist when it... Read More

Five Break-through Ideas to Immediately Increase Profits and Improve Cash Flow

Too often in business we get trapped into reviewing our... Read More

Top 10 Record Keeping Mistakes Business Owners Make (and How To Avoid Them)

If you interviewed business owners of failed businesses, a majority... Read More

Pressure Washing and Hospital Accounts

Most pressure washing companies never look into some of the... Read More

Small Businesses You Can Start in Automotive

There are many choices when thinking about a small business... Read More

Market Makers Play a Significant Role in Reverse Mergers

One overlooked individual in the process of taking a company... Read More

Technology Community Helps SMBs Focus on Their Core Business

If you're starting your own business or currently work for... Read More

Franchise Company Operations Manual Sample Outline

Many companies wish to expand and a few wish to... Read More

Pressure Washer Companies and Steam Cleaner Maintenance

If you run a pressure washing business it is a... Read More

Secrets of Cleaning Truck Trailers in Your Fleet from a Veteran Truck Washer

Cleaning the trailers towed by big trucks is not easy,... Read More

Starting a Pressure Washing Business

Are you thinking of starting a small pressure washer business... Read More

Small Business Security No Passing Fad

How careful are you with the data you collect from... Read More

Five Simple Software Tips for Small Business Owners

The start of a new year is a time for... Read More

Do You Want Your Own Fully Programmable ERP? - Part 3

Continuing from the second article:6. About the aground mathematical model,... Read More

Quality Controls for Franchising Companies Sample Outline

Quality control in franchising companies is paramount and all franchising... Read More

Specialty Advertising in C-Stores

It appears the mini-blimp indoor theme and concept is making... Read More

The Inside-Out Business Plan? -- Your Small Business Plan in 10 Easy Questions

Writing a business plan for your Solo Entrepreneur business doesn't... Read More

Government Does Not Pay Its Bills on Time

Many small companies work very hard to get new accounts.... Read More

Shopping For a Franchise

Shopping for a franchise is easy if you know what... Read More

A Portable Trade Show Exhibit Makes for an Easier Show

You can make your trade show experience much easier by... Read More

Postcard Marketing Your Small Business

One of the best marketing strategies a business or organization... Read More

The Misconceptions of the Value Of Disclosures in Franchising

Disclosure laws in franchising are suppose to help the consumer.... Read More

Dispute Resolution; Competing With Other Franchisees

If you are in a franchise and have a territory... Read More

7 Reasons To Take Control Of Your Small Business? Checking Needs

Business checks are available in many styles and varieties. They... Read More

Launching your Business with a Chamber of Commerce

Why are Chambers a good launching pad?Chambers provide you with... Read More

Business Success - The 42 Greatest Business Tips

What does it take to grow a business and run... Read More

Top Ten Tips for Leveraging Conferences for Big SUCCESS!

As I am preparing for my attendance to the CoachVille's... Read More

Why Small Business Must Turn to PR

If small business had no important outside audiences, it wouldn't... Read More

Franchising Industry Burdened in Over Regulation

There were only an estimated 1800 active franchisors in this... Read More

Top 7 Small Business Resources for 2005

If you want to start a business in 2005, and... Read More