Saving business costs: creating a frugal corporate mindset
Look after the pennies, goes the old maxim, and the pounds will look after themselves: by managing the small details of your company finances, you will also have greater general control over the macro-profitability of your business.
Managing finances is much easier (and more effective) when you have your full workforce concentrating on reducing business costs. Here’s a few tips to help create a cost-saving company culture.
1. Encourage staff to imagine expenses are their own
Especially in the new age of mobile-led searches, most people carefully research and consider purchases before they are made. So by encouraging employees to take personal responsibility for expenditure and think of the cash as ‘theirs’, you can help use that instinctive, information-led focus to reduce unnecessary purchases and save costs.
2. Encourage innovation
Often cost savings come through simply doing things more efficiently. As the people working ‘at the coalface’, your employees are usually best placed to see where processes don’t work properly, and also where new efficiencies can be made. Encourage staff to identify and report problems and potential solutions, perhaps even offering bonuses and incentives for ideas that are taken up, and watch your wasted expenditure fall.
3. Set an example
As the head of the company, all your employees will notice if you buy a super-expensive desk, or indulge in frequent business lunches or company car-use. If staff see this kind of expenditure from the top, many will automatically assume that cashflow is fine, and there’s no need to watch costs in their department either. If you want to create a true culture of prudence, you need to set the tone top-down and show responsible, pro-active company promotion without wastage.
Need more tips for cutting wasteful expenditure from expert business accountants? Give our team a call – we are highly experienced in working with small businesses and limited companies, and can give specialist advice on costs saving.
