Avoid these cost reduction mistakes for your business this year

 

Facing highs and lows is quite common while running a business. One day, you might earn the biggest deal ever and the next you might face a hard fall due to external reasons. While being cautious of it and preparing for the best and the worst before hand is crucial, many organizations restrict their expenses by cutting their costs.

Cost cutting is always a diplomatic idea for the firm’s survival, but it cannot be used for the long-term goals. Just like humans, every business is unique! And it needs proper nurture to prosper in this cut-throat world. Here are some of the pointers that you should not follow while cost reduction,

Sales and Marketing

These two departments go hand in hand. While one is the bread earner, marketing – you can say – is the face of the business. Cost reduction for these teams should be done carefully and consciously. Examine all the applications the resources use and divide the crucial ones from the non-significant ones.

The same goes with the resources too. The business lead should not include emotions while deciding for the human resources. Although, you can always empathize and if possible, offer references to the other companies too. With applications and tools, choose the ones that are ‘one-size-fits-all’ and that are compatible with the workforce.

Protip: Both sales and marketing can use email search tools like GetEmail.io to find prospects and determine leads. It’s chrome extension to LinkedIn and Gmail helps you find email addresses within seconds!

Not going digital

We’ve seen how pandemic couldn’t stop the world from running! Surely, it has slowed us down and we need a lot of catching up to do. But, even at the dawn of the post-pandemic era, many businesses are thriving! That reason is that they have evolved their business style to digital. Do you know?

More than 71% of boards of directors accept the investing in digitalization and technology is the top priority for company’s growth! However, not many are interested in investing in it because of the financial challenges one might face. Instead of closing the door for innovation, consider cutting cost elsewhere.

The third party

Various companies outsource the tech solutions to other vendors. This of course is a great idea to because you won’t have to worry about human logistics but, every comfort comes with a price. The third party might charge you higher than usual, you might be forced in to signing a deal on unfavorable terms.

Regardless of the reason, one must stay vigilant and see all the offer available on the table. Take some time to figure out if outsourcing is a better solution for a long run and if that is financially feasible too. Otherwise, you can always choose to create and hire a in-house team and work for the solutions.

Final thoughts

The above aspects will ensure that the company finances don’t go haywire. You can also invest your time in researching about miscellaneous expenses that the company incurs regularly and keep a tab on them.

The motive behind all these should be to find the right balance before the company loses it. It doesn’t mean that you need to stop people from innovating and creating new ideas. All we need to do is figure out the plan with limited budget!