It’s imperative for small business owners to look back and see how their revenues have been and whether the cost-reduction measures they set in place have been effective in actually bringing down costs within their organisation. While many business owners start off with great gusto on their cost reduction efforts, not all are successful in getting their employees to fall in line with them; the entire exercise loses momentum and makes the effort futile.
If you are looking to shave costs in the forthcoming year with more success than you have had this year, you should take a relook at how you encourage low-cost behaviour in employees to improve your profitability in the forthcoming year. Travel and entertainment costs tend to be one of the major expenses for most businesses, yet it’s often one of the last items to be addressed when a company seeks to optimise spend and cut costs.
Some steps to take
There is a simple reason for this entertainment and travel costs directly affect the morale of the employees. If a business owner sets too many policies and stringent controls that can result in friction. However, there are certain smart initiatives that can keep your employees engaged in a manner that encourages them to save costs without impacting their morale. Here are some pointers that can prove to be helpful:
Make every effort to help your employees recognise the importance of savings. Show them how travel affects your company’s bottom line and the manner in which small yet consistent savings in this area can change a company’s fiscal route for the better.
#2 Set firm goals
It’s important to have company level goals that all your employees can work towards in such a way that they will benefit from it. These goals should get your employees sharing different best practices and it helps build a team mindset; slowly but surely you will see that they motivate each other to save costs for the organisation.
#3 Reward employees
When you allow employees to share in the savings that are generated by them, it has a very positive impact. The idea is that your employees need to benefit first hand from all the savings they help make for their employer. When you set some direct incentive for the cost-sensitive behaviour displayed by your employees, they go the extra mile to seek out new ways to save.
#4 Set a good example
The importance of a leader setting an example with reference to cost savings cannot be overrated. If you want your employees to save money, you need to set an example and do the same. That is one of the most effective ways of encouraging cost-saving behaviour within your organisation. See how you can cut costs on your hotel stays and other travel expenses. When they see you leading by example, they will be more encouraged to follow suit and that is when you will notice a more positive change in the cost-cutting aspect within your organisation.
#5 Celebrate your employees’ successes
It’s also extremely important to recognise the achievements of your employees in one way or the other. It could mean honouring the top savers at the company’s annual event, sending out emails to everyone in the company with stories of exceptional cost-savings efforts made by certain employees, or even having some perks for teams that make the biggest efforts and impact.
For effective and sustainable cost reduction methods & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 02 9525 0777. If you prefer, write to us at this email address, and we will revert quickly.
Thanks for reading,
Benchmark Cost Solutions Team
02 9525 0777