At the last corporate webcast, your CEO delivers an optimistic review of quarterly results. Profits are up, revenues are strong, and stock performance is solid. But at the next departmental meeting, management unexpectedly mentions layoffs. Your coworkers exchange blank stares and confusion ensues. In the past few years, there have been acquisitions, facility upgrades and expansions. When did the company start experiencing problems? You wonder. This article takes you through Cost cutting strategies Ontario in downsizing.
Running a company requires a combination of long- and short-term strategies. Especially during periods of economic uncertainty, executives must find a way to keep the company afloat in the short-run but prepare it for future growth. Payroll expenses are targeted to avoid paying high salaries and to eliminate redundant functions. Roles once held by middle managers are delegated to supervisors and upper management. Tenured employees can be replaced by interns, temporary workers or new hires for less pay.
This may appear as a good cost-cutting strategy to most online entrepreneurs; however, direct feedback by customers acquired through these live chats is one very good source of evaluation tool for your company in terms of dealing with customers and their specific issues and concerns.
Shorten Cycle Times. Examine your purchasing cycle. Does it involve too many manual processes to complete the sale? By automating routine tasks in the sales process, the purchasing cycle is shortened. Shorter cycle times mean that the money can come in much faster. Let us never forget, time is money!
It's a vicious cycle, but one many believe a necessary evil to sustain their future. Or is it? Ron Ashkenas, business blogger and consultant, argues there are three alternative strategies: keep it simple, value added products and future-oriented thinking. Keep it simple. As companies grow, needless positions and locations are added. This leads to a complex reporting structure and more costs. Instead, consolidating tasks and re-evaluating expansion efforts will keep short-term expenses to a manageable level.
It is also dangerous Cutting down the budget for promotion and marketing. This is yet another thoughtless response businessmen do when cost-cutting their business expenditures. Many entrepreneurs see the fluctuating economy as a sign to cut down their marketing budget believing that somehow it wouldn't affect their business. However, as unpredictable as the economy could get, you are risking your business' chance of getting publicized to probable customers.
Certainly you want to reduce expenses and eliminate unnecessary costs. However, these actions alone don't address the underlying problem. And the underlying problem is revenue. So relying on a cost-cutting strategy is only useful if you expect the business environment to improve. Otherwise you must take additional actions in the areas of competitiveness, pricing, products and services. These areas are largely under your control.
Ultimately, the company will preserve its reputation, gain the trust of its workforce, and help drive down costs until the economic nightmare is over. Examine employee compensation plans more closely aligned with sales revenue. Partner with other businesses and suppliers to develop a win-win strategy. Participate in your Chamber of Commerce, and other business and professional associations - network! See what other businesses are doing, and what works!
Running a company requires a combination of long- and short-term strategies. Especially during periods of economic uncertainty, executives must find a way to keep the company afloat in the short-run but prepare it for future growth. Payroll expenses are targeted to avoid paying high salaries and to eliminate redundant functions. Roles once held by middle managers are delegated to supervisors and upper management. Tenured employees can be replaced by interns, temporary workers or new hires for less pay.
This may appear as a good cost-cutting strategy to most online entrepreneurs; however, direct feedback by customers acquired through these live chats is one very good source of evaluation tool for your company in terms of dealing with customers and their specific issues and concerns.
Shorten Cycle Times. Examine your purchasing cycle. Does it involve too many manual processes to complete the sale? By automating routine tasks in the sales process, the purchasing cycle is shortened. Shorter cycle times mean that the money can come in much faster. Let us never forget, time is money!
It's a vicious cycle, but one many believe a necessary evil to sustain their future. Or is it? Ron Ashkenas, business blogger and consultant, argues there are three alternative strategies: keep it simple, value added products and future-oriented thinking. Keep it simple. As companies grow, needless positions and locations are added. This leads to a complex reporting structure and more costs. Instead, consolidating tasks and re-evaluating expansion efforts will keep short-term expenses to a manageable level.
It is also dangerous Cutting down the budget for promotion and marketing. This is yet another thoughtless response businessmen do when cost-cutting their business expenditures. Many entrepreneurs see the fluctuating economy as a sign to cut down their marketing budget believing that somehow it wouldn't affect their business. However, as unpredictable as the economy could get, you are risking your business' chance of getting publicized to probable customers.
Certainly you want to reduce expenses and eliminate unnecessary costs. However, these actions alone don't address the underlying problem. And the underlying problem is revenue. So relying on a cost-cutting strategy is only useful if you expect the business environment to improve. Otherwise you must take additional actions in the areas of competitiveness, pricing, products and services. These areas are largely under your control.
Ultimately, the company will preserve its reputation, gain the trust of its workforce, and help drive down costs until the economic nightmare is over. Examine employee compensation plans more closely aligned with sales revenue. Partner with other businesses and suppliers to develop a win-win strategy. Participate in your Chamber of Commerce, and other business and professional associations - network! See what other businesses are doing, and what works!
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