My dear Aunty B,
My business is going well and we have a good cash flow thanks to a new payment system my CFO has put in place. But my end of year figures are looking pretty shabby. I think my staff regard me as a tight-arse, and I am reluctant to cut back any further. Any suggestions?
What do you mean you think they regard you as a tight-arse? You want to be SURE they regard you as a tight-arse – that’s your problem.
You, my good friend, are too nice. You should want to hear a few snide jokes in the office, a bit of name calling behind your back at the pub. Only then can you smile, knowing the staff have the message loud and clear – don’t spend a cent unless they have to.
Even then they should grimace and reconsider – is there a better way? A cheaper way that would work as well?
So the simple answer is: Yes! Cut away. In fact you should always be thinking of ways to cut. Here are 20 ideas to get you started.
- Raise your prices. You’ll be surprised how few complaints you’ll get about a 5% price increase.
- Sack a customer. Think about abandoning demanding customers who eat up too much time for too little reward.
- Drop a product from your range. Most companies carry products or services that are just not working or cost too much to produce.
- Change your bank. There’s plenty of big and small financial institutions out there, so shop around for the best deal.
- Put your printed materials online. Posting documents such as manuals and brochures on your website saves on printing, storage and postage.
- Change suppliers. China, India, Vietnam and Thailand are full of companies that can supply products cheaper than in Australia. If you can’t beat the importers, join them.
- Put lots of information on your website. This will help reduce the amount of time you spend on the phone answering customer queries.
- Bill customers promptly. Get your invoices out as quickly as possible to get them back faster.
- Create incentives for creditors to pay faster. Offer a small discount to clients prepared to pay within a week and your cash flow will improve.
- Weed out slow payers. Before taking on a major customer, check their credit worthiness and references. Bad debts are bad news.
- Use email. Cut postage costs by migrating customers to email.
- Cut your inventory. Don’t tie money in the warehouse. Get that money out there working for you. Or better still, get it back in your wallet.
- Consider different property options. Moving out of the city can save you a bundle on rent.
- Barter. Look for companies with which you can exchange goods and services. It keeps cash in your pocket and helps you network at the same time.
- Add a new product or service to your range. Then bundle the new product or service with your new offering and watch revenue grow.
- Pay your bills online. It saves on cheque fees and postage costs.
- Consolidate your loans. Multiple loans mean multiple sets of fees. Consolidate and save.
- Change your phone company. Communications — particularly mobile phones and internet — can be expensive. Review your supplier and don’t sign a contract longer than 12 months unless you’re sure prices aren’t going to fall.
- Do things out of season. Conference facilities, hotels and airline flights are cheaper at certain times of the year. Plan around this and save.
- Negotiate. It makes some people uncomfortable, but haggle away.
Your Aunty B