How to cut family expenses. How to reduce costs
How to cut your expenses to a minimum? And, preferably, without much discomfort, and so that it is not noticeable. This is probably the most common question of most people in our country. And it's not easy.
Living beyond one's means, taking on loans and debts is a common occurrence in our difficult times. And no matter how much a person earns (100 thousand or 20 thousand rubles), with almost a hundred percent probability, he will not “fit” into his budget. Why does this happen and how to reduce your expenses to a minimum, so that you not only have enough to live on, but also succeed?
Why is there never enough money?
"Income and expense". This expression can be applied to most of the population. No matter how much a person receives, he still will not have enough. Why it happens? Why do people with a decent income constantly get into debt and take out loans?
In fact, there are many reasons, and each has its own, purely individual. Below we will give the main ones and consider why there is always not enough money.
First reason. financial illiteracy
Unfortunately, what is money, and how to handle it, is not taught either at school or at the institute. Most people have no idea how to manage their personal finances, don't "fit" into their budget, and constantly get into debt that they can't pay off. And the worst thing is that they perceive it as the norm and consider life "in debt" to be natural.
If you want to radically change your life and achieve in life, you just need to increase your level of financial literacy yourself and take control of your finances.
The second reason. It's you yourself
More specifically, your habits. Each person has his own stereotypes of behavior (habits) acquired over many years, which require certain financial costs. And it is in your best interest to audit yourself, identify money-consuming habits, and direct all your efforts to eliminate them.
Third reason. habitual state program
This is when a person for many years gets used to a certain habitual state, in our case, to a state of eternal lack of money. The state of lack of money, as a program is laid in a person, and he continues to live in this state even when he begins to receive a rather big income. Here you need to find your negative money programs, work on them and try to eliminate them.
Fourth reason. Money bar
Each person has his own level of income, beyond which he becomes uncomfortable. And he is trying with all his might to return to his usual and comfortable income level. Raise your money bar and you will see how your financial condition will change.
Fifth reason. Negative beliefs and repetitive mantras
Remember what you constantly heard from childhood? What is so firmly planted in your head? Of course, something like: “Money is evil”, “Happiness is not in money”, “You can’t earn money by honest work” and all that. It is these attitudes that prevent you from handling money correctly. You automatically subconsciously try to get rid of them. Therefore, you are in a constant state of lack of money.
The same thing happens when a person begins to constantly talk to himself: "I have no money", "I constantly do not have enough money." By this, a person programs himself for a constant lack of money.
Start tracking your thoughts and words, adopt the mindset of rich people, set yourself up for successful life. And you will see how your life will change dramatically.
First. Strict cost accounting
Keep a strict record of all expenses for a month. This way you will understand where your money is going. Review the results at the end of the month.
Second. Cost reduction
After the analysis, think about how and how much you can reduce costs. To do this, divide your expenses into mandatory and not very mandatory.
Mandatory - these will be the expenses that you are required to pay every month (utilities, electricity, internet, etc.). They are almost impossible to cut. Almost - because, being smart, you can find a way to reduce them at least a little, but reduce them.
Not very required - these are the costs that you can influence (reduce or remove). Expenses for food, clothing, etc.
Third. Budget
After your expenses are categorized, for the next month. To do this, think carefully about which expenses you can completely eliminate, and which ones you can replace with less expensive ones. In the event of unforeseen expenses, try to reduce this amount from other cost items a little at a time.
Fourth. Follow the plan
Now you need to strictly adhere to the plan. If at first something doesn’t work out for you, don’t despair and don’t give up this activity. Keep trying and you'll get better and better month after month.
- Savings on food
Before each purchase of products, it is necessary to carefully consider its need and before each trip to the store, be sure to make a list of what you need. Also, do not go to the store on pay day and on an empty stomach. So you will save yourself from impulsive and unnecessary purchases. You can also follow promotions and sales. You can buy much cheaper there. Don't buy branded products. On the shelves are usually cheaper analogues. They are usually much higher or lower than your eye level. Too cheap things also do not make sense to buy. No need to save on quality, as a result you will overpay. Look for the golden mean.
- Do not use credit cards and do not take out a loan
They are designed to get more money out of your pocket. You yourself will not notice how your card becomes empty, and even penalties and fines are accrued.
And remember that the best loan is the one you turned down. He will not bring you profit, but he will surely drive you into a debt hole.
- Reducing car costs
Own transport well spoils and laziers a person. He is even ready to go to the toilet by car. If you start walking at least occasionally (for example, to the nearest store), or taking the subway, you can significantly reduce gas costs.
- Save on mandatory payments
In our time, you can always choose a cheaper tariff for the Internet and phone. You can put meters on gas and water.
But with electricity, everything will be more complicated. This is by far the largest fixed cost item. But it, if you think carefully, can be significantly reduced. Here, just all the electrical appliances that you have must be turned off from the network. Incandescent lamps can be replaced with energy-saving and LED ones. Buy all equipment with class A energy consumption.
- Savings on the pharmacy
Doctors like to prescribe expensive imported medicines. There are even rumors that the manufacturers pay extra for it. For almost every expensive imported medicine, there is a cheaper analogue. Do not be lazy, take an interest and buy analogues that are many times cheaper.
- Change your habits
Habits are second nature. They tell us what to do and how to do it. Surely many of them require considerable costs. Do some self-analysis, identify high-cost habits, and do your best to eliminate or reduce them to a minimum.
There are many more ways to cut costs. It's all individual, everyone has their own errors in their budget. And your task is to identify them and eliminate them. And you will not only start investing in your budget, but you will also be able to create savings. And this is already a certain financial well-being and financial stability.
Also, you can express your opinion about the article and the site itself in the comments, indicate the shortcomings of this resource.
The site MyRublik will be very GRATEFUL to you.
Andriy Zinkevich - that in order to optimize costs, it is necessary not to cut salaries, but to refuse unprofitable clients
IT tools used by Andriy Zinkevich
- Evernote
- Megaplan
- Disqus
The difficult situation in the economy is forcing many entrepreneurs to drastically cut costs. But the reduction of the reduction of strife - there is an optimization of non-strategic costs that is useful for business, but there is a disastrous sequestration of cost items that are important for the development of the company. Andrei Zinkevich, the founder of the Customer Acquisition and Retention project, spoke about how to reduce costs, but at the same time not demotivate key employees and not lower the quality of the product.
Entrepreneur, internet marketing specialist. Project Founder "Customer Acquisition and Retention". Co-Founder and Director of Community Marketing "Club of Directors". Author of several books on internet marketing. Lives in Poland.
think about expenses
Previously, when asked how to cut company costs, I would not hesitate to answer with my favorite quote: “Think not about expenses, think about income!” And I would suggest, first of all, to start with a review of the system of customer generation and sales, and only then focus on reducing unnecessary costs.
But today is a little different.
In many CIS countries, including Russia, there is now a serious economic crisis. The collapse of national currencies ranged from 50% to 300%, and with it, the incomes of the population also fell. All this in the aggregate dealt a very heavy blow to small and medium-sized businesses.
Therefore, in a situation where the number of customers and orders is falling sharply, it's time for any company to think about cutting costs. But you need to do this in such a way as not to cause serious damage to your business, customers and employees.
Is it possible to cut costs quickly and painlessly? We'll talk about this.
Strategic and non-strategic spending
Bob Phifer, author of Costs Down, Sales Up, has a great breakdown of costs. He divides all expenses into strategic (which provide the company's profit) and non-strategic (providing the work process, but not generating income).
Phifer includes marketing (attracting new and retaining old customers) and bonuses to sales managers as strategic expenses. That is, targeted investments aimed at increasing sales and profits of the company. Non-strategic expenses include office rent, purchase of office equipment and stationery, salaries of administrative staff, etc.
Outperform your competitors in terms of strategic spending, delivering those costs in any conjuncture, in good times or bad;
ruthlessly cut non-strategic spending to an absolute minimum.
But, in fact, many businessmen do the opposite. Let's take a look at three of the most common mistakes entrepreneurs make when cutting costs.
The three most common mistakes
while reducing costs
Mistake #1: Pay cuts
Cutting staff salaries is the first thing that comes to mind for many entrepreneurs. Why shouldn't this be done? At least, because the employee will be angry with the manager, and his motivation will fall below the plinth.
A pay cut always results in an employee work time will be busy not solving the working issues of the company, but searching for additional income and new job. And as soon as he finds something more or less suitable, he will immediately leave you.
It makes more sense to think about laying off staff whose functions can be easily and painlessly outsourced than about cutting the salaries of key employees. The latter will always remember that you care about them, and will try to do everything possible for the growth of the company.
Mistake two - reducing investment in marketing
The second common mistake is cutting back on investment in marketing. Why can't this be done? In the United States, a study was conducted that found that those companies that did not cut their marketing budget during the financial crisis ended up becoming leaders in their industries. The same companies that cut back on investment in marketing lost both their market share and significantly weakened their competitiveness.
It is necessary not to reduce, but to optimize costs. And to do this, redistribute the marketing budget to the most profitable channels, abandoning the inefficient ones.
Mistake three - degrade the quality of the product
Degrading quality means giving the product a death sentence. The market has changed, the competition has become tougher, and the client has become more educated. Today the client understands that he is the king. And he is the one who makes the decision. Therefore, as soon as the quality of your product ceases to suit him, he will immediately turn around and go to your competitors.
Instead of compromising quality, think about different price scales and options for the client. Want to cut shipping costs? Raise your minimum order amount for free shipping. The client wants to pay you less money? Reduce the number of services provided. But never and in any case do not degrade the quality!
In addition, there are effective ways to reduce costs, which we will discuss below.
Seven ways to cut costs quickly and effectively
Method one - abandoning the office
When I advise you to give up the office, many look at me in bewilderment and twist their fingers at the temple. But let's face it. If your office does not double as a warehouse, showroom and sales point, then you can easily do without it.
Firstly, office rent and maintenance is one of the most significant items among non-strategic expenses. Just calculate how much you could improve your financial situation if you removed the cost of renting and maintaining an office (at least partially) from the cost items.
Secondly, you would significantly save your employees time (which they spend on getting to work and returning home) and money (lunches, coffee, transport, etc.).
Of course, many entrepreneurs are not mentally prepared for this approach. After all, they immediately have a question: how will the staff work without my control?! I will answer the question with a question: why do you need employees who work only under duress and only when they have a leader over their souls? Dismiss them!
Think about management by goals (I recommend Brian Tracy's book "Motivation"), write down a strategy and step-by-step tasks for its implementation for each employee, use programs that allow teamwork and track the status of each process and task (Megaplan, Bitrix, Trello , Basecamp). Finally, tie employee pay to performance and goal achievement.
After all, I hope you are interested in the results?
Method two - outsourcing
Outsourcing - effective method significantly reduce costs. For example, if you have a lawyer on staff, then you bear the costs of his salary and workplace arrangement. But if at the same time your business does not need significant legal support, then you can safely refuse a lawyer and conclude a service agreement with a good law firm.
There are several advantages. firstly, if something goes wrong, you can always file a claim with the company serving you, as well as apply penalties. Secondly, if your company also provides services that can be useful to a law firm, you can simply arrange for a partnership and barter exchange. Thus, giving up unnecessary costs.
Method three - percentage and bonus for completing tasks instead of a bet
The third way to quickly and relatively painlessly cut costs is to move employees from a flat rate to a percentage. But before you do this, you will need to familiarize yourself in detail with the functions and responsibilities of each employee.
If, for example, a sales manager or marketer can be given a percentage of sales and the implementation of the plan, then this will not work with an accountant or client manager. Calculate how many targeted actions the accountant performs (number of entries, preparation of reports, filing documents with the tax office, etc.) and set the payment for each action or for achieving the result.
You may find that you do not need an accountant on a full-time basis (especially for small businesses). Then you can safely offer him to work for you and run a few more companies.
Way four - rejection of ineffective marketing channels
In times of crisis, one of your key tasks will be to carefully analyze the effectiveness of each marketing channel. Look at the achievement of goals, ROI and payback period, the number of potential customers. Based on the received analytics, refuse unprofitable and unprofitable channels, and reallocate their budget to more effective ones.
Method five - rejection of unprofitable customers
Clients need to be fired too! And the crisis, like nothing else, is suitable for this.
Look at the clients who take up 80% of your time while bringing in only 20% of your profits. Do you need them at all? Maybe you should focus on working with key customers and offer them some additional services or products?
Just think, what would happen if you could free up 80% of your time resource and refuse customers who fool your head and spoil your nerves? I am 100% sure that after that you would find a significant part of the costs that you can refuse.
Method six - deferred payments to suppliers
Think about which supplier your company is a serious and important customer for, and then contact them and ask for an additional deferred payment. Many people are afraid of losing customers, so your suppliers are more likely to agree to make a concession.
Method Seven - Audit Non-Strategic Spending
This is the easiest way to quickly cut your company's costs. Analyze what the company's money was spent on in the previous month. Buying coffee and cookies, office expenses, consumables, calls on personal issues from a work number - all this can be safely cut and not demotivate employees.
Just announce to everyone that next month the budget for such items will be cut by 50% - people will understand this, especially if it does not affect their salaries.
It often happens that we want to buy something new, or go on vacation to warm countries in the winter, but our budget cannot afford such expenses. We have to put the dream on the back burner, and wait for better times, higher earnings, higher wages. But when earnings increase, wages rise, then again we cannot allocate money for something necessary. What is the problem? Why does this happen?
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As a general rule, the more you earn, the more you spend. The level of spending increases proportionally with the level of income. Therefore, first of all, you must learn to control your expenses, consciously understand where the next thousand rubles goes, and whether you need the product that you put in the basket.
Recently, a large-scale study was conducted, as a result of which scientists proved that if a person controls his expenses, follows certain rules, then he can save up to 20% monthly. And if your expenses are $2,000 per month, then the annual savings will be almost $5,000. Impressive, isn't it? Today we will tell you these 10 rules with which you can cut costs without the slightest damage to your family.
1. Spending plan
You should develop the habit of making a monthly spending plan. Of course, it is impossible to foresee everything, and if something emergency happens, you will have to spend money. But be honest, emergencies don't happen that often, so you need a spending plan. Write on a piece of paper everything you need to buy next month. For example, these will be products, perhaps some hygiene products, various household items, clothing. The list should be clear and understandable, without vague phrases that will allow you to spend more than the established norm.
After you make the list, make a promise to yourself that this month you will not buy anything extra, and that all purchases must be made according to plan. In the first months, it will be difficult to maintain such discipline, but in the future, such a practice will become the norm.
2. Cost accounting
After you have made a plan, you need to understand where and how much you are spending. It is impossible to cut your costs without a real understanding of the situation. If you see that the food column is 50% of all expenses, then write it down in detail. Very often people buy a lot of unnecessary food, which then rolls around in the refrigerator and eventually goes into the trash. In fact, you are throwing away your money, and to be precise, your time spent on earning this money. Systematize expenses, do not spend too much, appreciate yourself and your work.
3. Quality, not cheap
It would seem that if we want to save money, we need to buy cheap goods. But this is far from true. Cheap ones are not the best. It is better to buy something of high quality and more expensive once, but it will last for several years, rather than a cheap one, and throw it away after a couple of months.
I had a similar experience with shoes. A few years ago, when I was paying attention to prices and trying to save on everything, I had to buy sneakers. I chose a shoe for myself in some store a la “goods from China” for literally 15 dollars. It was late spring, and I planned to buy shoes for the summer. But it didn't happen as expected. Over the summer, I bought myself 3 pairs of shoes for $ 15, because all the Chinese cheap stuff was torn after the first rain. The following spring, I did not repeat such mistakes. I went to a well-known sportswear store and bought myself $60 discounted sneakers. They have served me for almost 3 years, which I still very times.
Therefore, buying cheap stuff you, as a rule, are unlikely to save.
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4. Discounts and sales
Another reason for extra spending is discounts and sales. Marketers know how to get you to buy something that is completely unnecessary. We respond to red price tags, to huge sales, to the words “only today”, and “don't miss the last chance”. During these weeks of discounts, you can buy something you need at a very low price, but most often you buy a bunch of things that are worn several times and then gather dust in the closet for years.
5. Credit cards
Now many banks offer excellent conditions for using money in accounts. If you withdraw them through ATMs, you must pay a commission, and for cashless payments, the commission is not charged. But there is one feature here, pay only with those cards on which there are personal funds and no credit limits.
The possibility of obtaining money on credit does not show you the real picture when shopping. You can pick up goods, pay, get several thousand rubles in debt, and then not understand why the bank has calculated a penalty, and why you have such minuses on your bills.
6. Shopping list
Before going to the store, be sure to look in the refrigerator, see what you really need and what you can not buy yet. Make a shopping list with only the essentials. In the store, you need to strictly follow this list, and not give in to advertising moves and the genius of marketers, inviting you to buy something very important, but completely unnecessary.
If you go to the store without a clear idea of what you need to buy, then be prepared for the fact that your cart will contain a lot of unnecessary goods, and at home you will see that there is still a piece of cheese in the refrigerator, and you bought a kilogram of fresh.
7. Planning for major expenses
If you want to buy something that significantly exceeds your monthly income, then you need to plan ahead. A car, an apartment, an expensive trip abroad - think about it at least a year in advance. Otherwise, when it comes to buying, you will have to take out a loan, and the same car will cost many times more. It is these unreasonable expenses that should be avoided.
8. Buy in bulk
If you are making a shopping plan (several weeks in advance), then it is advisable to buy everything in a hypermarket. As a rule, in large chain stores prices are 10-15% lower than in small retail ones. If you spend 500-1000 dollars a month on food, then calculate how much the savings will be with bulk purchases weeks in advance.
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9. Out-of-season shopping
Learn to buy things at the end of the season, when many stores offer great discounts on them. At the end of winter, you can buy a great jacket for next year with a discount of up to 90%. Let it lie in the closet, let the ladies of fashion not appreciate your choice next year, but it will be several times cheaper and more practical. And spend the money you save on relaxation and pleasure.
Seasonality is not limited to clothing. There are various seasonal discounts for travel packages, cars, and many other things. You just need to figure out what and when is more profitable to buy.
10. Public transport
If it is profitable and convenient for you, then why not use public transport. Yes, the car is more comfortable, but not always more practical. I live 3 minutes walk from the metro, and I have a good, comfortable car. But very often I go down to the subway, because I save not only money on gasoline, but also my personal time, which I will spend standing in traffic jams.
11. Give up credit cards
One well-known billionaire, to be honest, I don’t remember his name, once said: “The best loan is the one that you refused.” Do not make purchases on credit, because they will drive you into a huge debt hole, from which it is difficult to get out both morally and physically. People begin to get used to living not at their own expense, and so the whole life passes in debt to the bank.
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If you want to buy something, but there is not enough money, then it is better to wait, save up, try to raise the required amount, but do not go to the bank for "help". A loan will not add money to your wallet, but on the contrary, it will empty it even more. Think, if you could not accumulate the required amount for the purchase, then how are you going to pay off the loan?
Perhaps this is all the advice that I wanted to give you today. But at the end of the article I will say that it doesn’t matter how much you earn, the main thing is how and where you spend money. This is what defines a successful and promising person who always cares about the future, living in the present.
To start saving money, you need to cut your spending. There are plenty of savings options to help you avoid feeling like you have too much spare money left to spend at the end of the month. Some of these options will require careful planning and research into relevant information, but they will be well worth the effort. Others can be tried immediately. Still others involve small investments that will pay off in the long term. Which of the options is right for you will depend on your budget and available funds.
Steps
How to understand where the money goes
How to get rid of extra spending
How to save on utility bills
Use the energy of the sun for lighting. There are simple inexpensive solar-powered lamps that work well. There are more expensive ones with more features. The beauty of solar lights is that they shine just as brightly as regular ones, and during the day you can charge them while you're not using them.
How to cut transport costs
- Make a list of everything you need to buy before you go to the store so you don't have to make multiple trips.
- Don't drive for fun. Choose other ways to have fun (for example, read or play sports).
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Check tire pressure. Convertible-top cars use less fuel when the roof is closed (although the money spent on an extra couple of liters can provide you with relatively inexpensive fun when driving with the roof open; at the same time, convertible-top cars themselves are more expensive than conventional ones). A poorly running engine consumes more fuel than it should. Even a new spark plug can help save fuel, as can fresh oil. In addition, the less you drive, the less often you need to change tires, oil and repair the car. All this will save money in the future, but the amounts can be significant.
Drive smarter. To start saving fuel and money, you should also change your driving style. If you move slower and less aggressively, you can save a significant amount (calculate this amount on this site: http://www.seabreezecomputers.com/savegas/#speed_calc (in English)). Try not to travel during rush hour as otherwise a car will be expensive and slow compared to public transport. Don't park in expensive places. It is quite convenient to use public transport in the city, since almost everywhere there is a timetable and a route map.
Analyze your fuel and other car expenses. When fuel was scarce during World War II, America had the following slogan: "Is this trip really necessary?" Ask yourself this question every time you get into a car.
How to cut costs on clothing and entertainment
How to spend less money on food and drink
Try taking your lunch to work so you don't have to buy lunch every day. Even an inexpensive lunch in a cafe costs money, and if you add up the cost of all meals in a month, you will get a large amount.
Use coupons if stores in your city provide them. Use coupons to buy foods that you usually eat so that they do not spoil or lie idle in your closet. Also try to buy goods under your own store brand and use discount cards. But remember that store-branded products often turn out to be just as good and cheaper than more well-known brands, even if they have a discount card or coupon.
Buy in small wholesale stores. Even if you first need to buy a special card, its cost will pay off already from the first purchase. These stores sell well-known brands. In addition, with wholesale stores, you will have to travel less often for groceries and you will be able to avoid the temptation to make an impulsive purchase. However, shopping in such stores should also be wise, otherwise you will not save money.
Spend goods sparingly. Control how you use laundry detergent, dish soap, flour, or cereal. Don't waste or throw away the excess just because the product was sold in a large package.
Buy only the products you will be using. Will you eat another brand of breakfast cereal because you had to buy it because your favorite was out of stock? Or will it stay in your closet?
Be aware of the impact promotions have on your behavior in the store. Don't give in if it makes you waste your money. If a promotion appeals to you, consider whether you normally use the product. If not, consider whether you should start using it and why. If you want this product just because it's in front of you now and you feel like it, don't buy it because it not enough.
Avoid substances that cause changes in consciousness and dependence, or try to use them as little as possible. Do not use illegal expensive substances that reduce current productivity, affect future productivity, cause health problems, or have a negative impact on the ability to assess the situation. All these substances will not let you save. Alcohol is one of them.
How to save on insurance
How to save money on shopping in general
Try buying used items. This will allow you to save money and use resources wisely. If you really need to buy something new, you don't have to go to big and expensive malls. You can buy things in second-hand stores and thrift stores, where you can find everything from household knick-knacks to electrical appliances and clothing. Young children outgrow clothes very quickly (when this happens, give the clothes to other people so that they benefit someone else). Buy things from people you know - they won't think less of you if you buy coats from them that they are trying to sell. Sell things you don't need because they might be useful to someone else. There are special sites for selling things from hand at competitive prices (for example, avito.ru).
Save on razors. If you shave, compare razors and see which ones last the longest. There are razors that stay sharp much longer than others, making the price difference less of a big deal.
To optimize costs foreign companies 20 years ago, outsourcing began to be used, which made it possible to reduce accounting costs by 20-40% and save $8 million on HR functions! We collected the opinions of experts on reducing the company's costs and presented two lists: what should not be done, and what, on the contrary, should be done.
Cost optimization: how not to
If it is wrong to carry out measures to optimize costs, then you can reduce profits, spoil the company's image and lose customers. Here's what you definitely shouldn't do.
Savings on employees
Reduction of staff, reduction of salaries, reduction of expenses for corporate parties and training have a bad effect on the work of the company. The remaining employees, as a rule, begin to look for additional income and devote less time to the main affairs. And their productivity drops even more.
Leonid Gavrilov, partner of the investment boutique Qviqa :
- Greed leads to poverty. On the contrary, it is better to invest in personnel training: the higher their qualification, the more they will earn for the company. You can not greatly reduce the cost of corporate vacations, because a joint vacation defuses the atmosphere and makes it easier to survive the crisis.
Reducing Marketing Costs
The most influential management theorist Peter Drucker stated that marketing is a cost that generates a profit. Because it is gathering knowledge about the needs of the customers to make the product useful to them and trigger a natural desire to buy. So imagine how you will sell if you don’t know if people need your product or not?
Companies often cut marketing spending by proportionally reducing budgets across all channels. But this leads to the fact that there are even fewer customers, profits are reduced, and the budget has to be reduced again. But you can do it smarter: find out which channels bring in the least customers, and cut costs only on them. They do this by surveying customers, connecting, tracking with the help of end-to-end analytics services. As a result, marketing costs will decrease, but its effectiveness will not.
Roman Fedosov, CEO of the Kompot digital agency:
– Having implemented call tracking, we found out that customers leave requests when clicking on the same word in a context that took only 5% of the advertising budget. The rest of the advertising channels did not work. We turned off all unnecessary and, having reduced the budget by 20 times, we achieved the result much faster than we planned.
If you also suspect that part of the money is spent on ineffective advertising, but you cannot find these channels, then order an audit from specialists. They will analyze the activity of your company according to 50 different indicators and help identify problematic points.
Deterioration in the quality of a product or service
BMW assessed the behavior of its customers and found that, on average, one dissatisfied customer tells about a bad interaction to 10 of his acquaintances, forming a negative attitude towards the company.
Therefore, be sure: if the quality of your product becomes worse, a lot of people will immediately know about it, and you will lose customers.
Andrey Zinkevich, Internet marketing specialist for the biz360 website:
– Instead of compromising quality, you can, for example, increase the minimum order amount for free shipping to cover postage or shipping costs. And if customers are not willing to pay a lot, then reduce the number of services or the weight / composition of goods.
Everyone remembers the story of the missing egg from a dozen, which turned into « nines, ”and how only 900 ml were poured into a liter package of milk. These are examples of how you can save on quantity while maintaining quality.
Cost optimization plan: how to
So that cost optimization does not bring new financial problems, it is necessary to reduce costs in a smart way. All the best good ways already invented before us 🙂
Give up the office or outsource
American researchers have calculated that if employees work from home half the time, then the company saves up to $110,000 per year on payment utilities, cleaning the office and buying consumables. In addition, remote workers less likely to take unscheduled days off and sick days, which typically cost the company $1,800 per year for each. At the same time, productivity at a distance increases by 35-40% which increases the profit of the company.
Another safe way to cut company costs is to pass some functions to . For example, instead of having a lawyer on staff, you can conclude a contract for legal support with a third-party company. Then instead of a monthly salary, you will only pay bills for specific services.
You can also negotiate with partners on barter if they are interested in your services.
Sergey Shukhrin, General Director of the Cleaning Factory company for the Delovoy Kvartal website:
- At GAZ, about 1,000 people serviced (cleaning) 43 workshops. The costs were very high, because once a month GAZ employees went for consumables, for which several cars, drivers, and suppliers were allocated. When the plant outsourced cleaning services to us, we reduced its costs to a minimum, and fewer consumables were needed. Now they carry only one car. By withdrawing the staff from the state, GAZ received an annual saving of about 10 million rubles.
Tie employee motivation to the execution of the plan
Are you sure that 10 managers who are on the same salary bring the company the same amount of money? In order not to pay in vain to those who earn nothing, it is necessary get rid of inefficient employees or motivate them for big sales.
To do this, implement . It is based on a small fixed salary and a percentage of personal sales or other personal merit bonuses. Lazy - receives 10,000 rubles, works hard - 70,000.