Saturday, January 24, 2009

50 Cost Savings Tips to Use NOW!

The Maver Management Group has been working with many companies to help them, not just cut costs, but to get and stay profitable. Here are some of the tips that we have gathered on cost cutting and a few on revenue generation that can be implemented TODAY without jeopardizing the integrity of your programs and services. You may have some of these already in place. Consider the rest of the tips.

Planning = Survival
• Develop a game plan that brings your cost saving activities in line with your overall business plan.
• When an employee leaves, evaluate whether the position is still needed, or whether it can be filled by a part-time person or outsourced completely.
• Conduct an internal business process review and streamline operations.
• Outsource all non-core functions (accounting, information technology
• support, printing/mailing, etc.).
• Get aligned with the processes of your suppliers and your customers to take duplication and waste out of the system.

Cash is King!
• Develop cash flow budgets and invest unused cash.
• Consider leasing versus buying your office equipment.
• Interest rates are at all time lows. If you have the credit refinance any outstanding loans.
• Adjust investment strategy to allow for more interest income in the short term.
• Renegotiate your credit card discount fee at least annually as credit card volume increases.
• Look to other associations and corporate credit cards for discounts on office supplies, equipment, delivery services, etc.
• Delay capital purchases.
• Require multiple bids on all products/ services above a certain threshold.
• Meet with your banker to review your monthly account analysis statement for potential cost savings.

Payables and Receivables
• Don’t undermine the relationships with suppliers or customers, but realize you are not their bank.
• Change payment cycle to twice per month or every two weeks.
• Stretch payments terms and pay no earlier than 30 days out, unless you can save on payment discounts.
• Calculate the average age of receivables outstanding over the past 6 months. Work it down despite the economic pressures on your customers.
• Change your policy to require prepayment for all product purchases and meeting registrations.

Budgeting and Cost Allocating
• Require all program managers and department heads to justify every line annually.
• Revisit budget assumptions quarterly to determine if upcoming projects are still necessary or if they can be postponed.
• Allocate all costs (direct expenses, personnel and overhead) to each major program area. Pull the plug QUICKLY on non-performing programs.

Un-Fix Fixed Costs
• Renegotiate contracts.
• Don’t be afraid to ask existing vendors for help.
• Cut down on hours/usage.
• If you lease your office space and plan to be there long term, consider renegotiating your lease well before the expiration date to lock in a better rate.

• Consider telecommuting to offset the need for additional office space.
• Utilize office/cubicle sharing to save space.
• Consider subletting excess space.

Make use of brokers
• Analyze all telecom costs (local, long distance, internet & conference calling).
• Get a better deal on health, disability, life, property and casualty and D&O through a broker
• Ensure that the broker’s commission is paid by the provider and not you.

Use the Web
• Learn and use social networking to drive business
• Find impactful means of delivering your sales message electronically vs. snail mail.
• Use the web for booking airline tickets and ordering supplies where there is an on line discount.
• Move printed materials to your website (e.g. Annual Report, newsletters, member communications, meeting brochures).
• Utilize e-learning or CD-ROM based learning for staff.
• Use audio/web conferencing versus in-person meeting. Archive for later use (sales to members).

• Ensure that someone in the office is monitoring supplies on a weekly basis.
• Prepare inventory sheets of essential items. Charge programs/departments for supplies used as a direct expense for their area.
• Buy supplies in bulk to get discounts.
• Buy last year’s models.
• Choose quality and replace less frequently.
• Use “store brands” since their quality is usually very good.
• Closely track FedEx, UPS, Airborne and local courier usage.
• Consolidate carriers for volume discounts or use Priority Mail for non-essential items.

Get staff involved!
• Make cost savings everyone’s business! Convince them why they should care!
• At least annually, review the association’s financials with the entire staff.
• Develop a program where staff receives a percentage of the cost savings.

Find “Low-Cost” Experts
• Get expert advice that pays for itself and takes the pressure off you.
• Rely on existing vendors for training and retraining.

Contact us, we can help.



John Maver
Maver Management Group
(925) 648-7561
Maver Management

View John Maver's profile on LinkedIn

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