No. 1: Target immediate impact

Eliminate, reduce, or suspend items that will deliver an impact in weeks or months, not in years. For example, target short term burst expenses rather than expenses designed for longevity. Look at what you can eliminate as a monthly expense and go to the annual items. Eliminate monthly expenses that can be paid annually.

No. 2: Cash is king

Target items that will have a real cash impact on the profit. If you’re taking credit cards as most companies need to, there are hidden fees. $10 - $100’s adds up quickly, daily and can be immediately saved with proper research in the most affordable processing system for your Company. There are 100’s of companies offering this service and it’s not one size fits all. There are resources to compare 15 companies across the board for your most cost-effective. TLC has a resource that compares multiple companies you’re your specific needs.

No. 3: Reduce, don’t freeze

Focus on costs that can truly be reduced or eliminated. You don’t want simply to freeze costs for the current period only to have them reappear later.

No. 4: Plan to do it once

Most organizations don’t cut deeply enough the first time, which means they often need to revisit costs and do it again. This creates a destructive and unproductive cycle of uncertainty, effort and lost productivity. This is particularly relevant for staff cuts, where cycles of ongoing reductions can be especially dangerous.

No. 5: Carefully inspect accounts

Work with your finance partner or bookkeeper to obtain a solid view of the expense-level detail, such as expense accounts, and key balance sheet accounts, including expense accruals and prepayments. Use this view to identify specific cash reductions that will immediately have an impact.

No. 6: Sunk costs are irrelevant

When it comes to saving money, it is commonly said that “sunk costs are irrelevant,” meaning that future spend should be considered without relation to past spending or “sunk costs.” From a rapid cost reduction standpoint this is true, but it’s still worth considering whether the savings will be more than the benefits that will be delivered by continuing long term.

No. 7: Address discretionary and nondiscretionary cost

Discretionary spending, such as for new projects, building or product improvements, adding additional stock… additional capabilities, or services, is often a seemingly easy place to cut. However, this can be your downfall as it assists with growth, even nondiscretionary “run the business” expenses, such as IT infrastructure and operations, can be cut by reducing usage or service levels.

No. 8: Track your marketing obsessively

Startup marketing is tricky, especially if resources and expertise are limited. Look at longevity. The one hit wonders don't work. You're in business for the long haul. Concentrating on branding, building your brand, and communicating that with your customer or clients is crucial. And even if resources aren’t limited, pumping money into paid short-term ads doesn’t guarantee you sales. Look for ways of Branding.

No. 9: Buy supplies in bulk

You know how this works; you’ve been to Costco or Sam’s Club. Bulk is cheaper by the unit. Try to eliminate unnecessary supply purchases and focus on the necessary in bulk. Or network with a company who can resource their skills and connections to bring you the biggest discount in your packaging or other related items. TLC can offer you this opportunity. Once you’ve eliminated unnecessary supply purchases, the truly necessary once are cheaper by the unit.

No. 10: Tackle both variable and fixed costs

Fixed costs are expenses that remain constant, regardless of activity or volume, such as office rent, subscriptions, and payroll. For fixed costs, focus on elimination or negotiations for reductions or changing the source of the cost. Variable costs change with activity or volume, for example, telecommunications, contractors, and consumables. For variable costs, focus on negotiating, bulk, reduction, or elimination. TLC offers expertise in negotiating services resources in all these categories of both fixed and variable business expenses.

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Phone: 831.275.0851

or email: info@togetherloweringcosts.com