How to cut our costs when we have no fat?

This article first appeared October 12, 2010.

Dear Aunty B,

We have to cut our costs, but honestly I have no idea how. We have been running hard for years and have been watching our costs and trimming as we go. We don’t have any unused phone lines or unused car spaces (see, we read SmartCompany!).

Any other ideas?

Lean and mean already,
Victoria

Dear Lean and mean,

Lean and mean with your words as well… you don’t say why you have to cut costs. What you need to do is this: step back from the business and look at its activities. Think of the strategy going forward. What you are looking for is a large cut you can make: not a lot of little ones.

One way to do this is to get expenses ranked from most expensive to least expensive. This will focus you on what is costing your business the most; which will inevitably be salaries if you are a service business. In the future, are all of your staff necessary? Can you do some functions for cheaper or can you outsource it (or bring it in-house?)

Can you do it faster, better, quicker, cheaper some way else?

Unfortunately this is not a quick process but one that is very well worth doing!

Good luck!
Your Aunty B

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