In Malaysian cities such as Kuala Lumpur, many businesses are looking to reduce operating costs whilst at the same time retaining productivity and profits. This can be a very demanding objective that requires extensive planning and assessment. Kuala Lumpur was rated number one with regards to business activity in middle income countries. The report, conducted by business consulting form A.T Kearney outlined the improvements made and noted the potential that Malaysia and, in particular, Kuala Lumpur has to offer. When business is slow and profits are falling it can be tempting to cut staff in order to save money. However, this is short term thinking and will not benefit your company in the long term. It can also have a particularly negative impact on the staff that have been retained. In addition to this, when fortunes improve you will be required to undertake another hiring process and perhaps training. Below are some alternatives to cutting staff.
Assessing and managing your providers
The first aspect of any cost-cutting initiative is to identify and manage your providers. A provider can be classed as anyone that provides your business with products or services. Take a look at your internet and telephone bills and evaluate them against other providers. If you identify other companies that offer the same services at better rates then look into changing your contracts. If your current provider wants to retain your business then they may offer you improved terms. Equally, insurance providers are all likely to give you a discount if you inform them of your intention to leave. Smaller aspects such as stationary can help to reduce office running costs. A regular monthly stock check will allow you to assess stationary usage.
Possible import savings
The cost of importing goods may have a significant impact on your business. There are ways in which savings can be made providing you understand some of the rules and regulations. Contact your local customs agency and ask for a statement relating to your import duties. This will show you how much you are paying and where savings can be made. One easy way to reduce import costs is to have all your goods delivered to one port if possible. This means that you won't be paying port fees on a number of unwarranted occasions.
Managing your finances effectively
It is important to keep up-to-date with your finances. In many cases, businesses have more than one bank account. This can multiply over a number of years which can result in a whole host of independent business accounts. It is possible that some of these accounts have smaller sums of money left in them and may not be accruing much interest. Pool all of your finances into one single account if possible and look for high interest accounts based on substantial deposits.
Effective staff management
It is important to maximize staff efficiency. Identify which staff members can be asked to undertake different roles if they are not busy. Look at ways in which to improve productivity levels such as Cloud computing. Improving the efficiency of your business will invariably lead to an increase in profits and reduce the possibility of financial problems and staff cuts.
Streamlining products, services and customers
There should be a regular assessment of both products and customers. It may be necessary to remove products and services that are not performing or proving popular with clients. Such aspects of a business can be a drain on other more successful elements. Streamlining customers may sound a bad move but it could save your company money. There may be a situation whereby a customer is using a lot of your time and energy for very little reward. Streamlining your customer base allows you to concentrate on more active customers who offer high profit potential.
Published by: SERVCORP