Cutting Business Costs
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Developing Cost Saving Processes
The primary benefit of putting cost control structures in place is to lower overall business expenses. You can limit for example the amount of money different employee levels can spend, keeping more money from going out the door… Cost control is an important factor for maintaining and growing profitability.
As COVID-19 takes a grip on the UK business community, whilst many business owners are now working from home, or in a reduced office environment, now is the perfect opportunity to review business costs, to provide the resilience for future uncertainties and competitive survival.
Costs vs Profit
Operating Costs Include:
Why do we need to apply cost control and cost reduction processes across the business?
Cost control aims at maintaining the cost structure in accordance with established targets or standards, but cost reduction is directed at exploring the possibilities of producing goods or providing services at lower costs, both have the intention of increasing profitability
The Risk Dashboard is analysing both cost control and cost reduction during the COVID-19 crisis.
Cost cutting refers to a number of measures that can be implemented by a business to reduce its expenses and improve profitability, these can include; laying off people, reducing staff pay, closing facilities, downsizing to a small office, or simply reducing or eliminating outside professional services such as advertising agencies or contractors.
There are of course associated risks with too much cost cutting. Laying-off staff includes severance pay, unemployment benefits, rehiring costs and wrongful termination claims, whilst lowering morale and risk overworking remaining employees.
Additionally, if the business turns around faster than expected, the business could find itself with a labour shortage, placing the business at a competitive disadvantage in an improving business environment – and the UK will recover from the COVID-19 crisis.
Health & Safety Support
Legal Services
Accounting & Book-keeping
Bad Debt Management
Training costs
Vehicle Costs
IT Support
Utilities
Digital Services
Telecommunications
Rent and Office Space
Plant & Machinery
Managing business costs is a continuous process of critically examining various elements and aspects of the business.