Mistakes made when Reducing Costs Part 2
10 November 2016 - 9:00, by , in Blog, Home Page News Feed, No comments

The fourth mistake made is not regularly measuring your usage. Anyone involved in using electricity, gas, water or oil needs to know how much their individual usage is costing the company and then needs to be given a target to reduce it immediately if it is found to be excessive. It is usually possible to reduce utility usage by up to 20% by altering human behaviour, as human beings have a natural tendency to be wasteful. Remember this includes all staff equally.

Our penultimate mistake made is not taking action and not resourcing. Cost reduction, much like holiday planning, is a proactive task, not a reactive task. Reactive tasks are prioritised because you simply cannot afford to ignore them at that precise moment. On the surface, proactive tasks do not demand such immediate attention, but if you are serious about reducing your costs you need to take action now otherwise you will never find the time. It will be too late. The most effective way of dealing with these issues is to outsource the cost reduction process to an outside company. By doing this, you can happily focus on dealing with reactive tasks and running your core business. It allows you to WORK SMART!

Our final mistake made when reducing costs is not communicating clearly. You need to be asking the right questions of the right people. The idea is to be in a position where you have all the relevant information necessary to make informed decisions on a wide array of issues, such as defining the specification, motivating your staff, dealing with your suppliers, measuring consumption, creating a cost reduction team, working out what your customers expect from your product or working with an outside company. For these reasons, improving your communication skills will help you enormously in dealing with every single one of the five other common mistakes shared recently.

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