Cost reduction. Do it across the company in small steps. E4A Profit Boot Camp Business Idea.
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Uploaded on Dec 12, 2011
Cost reduction is an important piece of the puzzle when it comes to running a successful business. Whenever you see something done with an economy of means, you will find a strategic person who knows what he is doing.
Here are the most important cost reduction techniques that Professor Hans Von Puppet recommends to you:
#1: Work better and more efficiently with your suppliers.
You should automatize most of the tasks that you do with your suppliers. Supplier raise prices when they have higher costs themselves. And some of their costs involve their customer service whose job is to work with businesses like yours. If they spend less money and time serving you then you can easily negotiate better terms with them. Don't make it hard for them and in turn they will make it easy for you as well.
#2: Cost reduction mantra: "Don't chase shinny objects."
Shinny objects are opportunities that seem to good to be true. Especially in the early stages of your business, it's important to devote most of your business time to things that actually work, that are proven. And devote the leftover time to chasing new opportunities. Do it not matter how promising these opportunities seem to be. Most of the things that work require some kind of work. You need to remember that there's no free launch. Where you find a free lunch, you will also find a con man waiting for fools to fall into his clever trap.
#3: Apply lean techniques to save money on your business processes.
Cost reduction can be achieved at the process level as well. Lean business process techniques are based on the assumption that whatever doesn't add value to the customer shouldn't be done at all. In this case, the customer of the business is considered to be the most important thing. And everything should be sacrificed to creating more value for the customer.
#4: Put your team to do low paid jobs like cleaning the floor and delivering the products to your customers.
These kind of low paid jobs are easy to do. If you hire someone else to do them, you probably have to pay them full time even though they spend most of their work day just waiting. And if you include the taxes and all other social contributions that you'll have to pay for them, you can realize how expensive can become a low paid job to your company.
The above cost reduction techniques will help you achieve better results in your business. The less you can manage with, the better you will do.
Go to http://www.profitbootcamp.co.uk for more ideas on how to grow your business.
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