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94 Ideas for cost reduction and profit improvement

Introduction to 94 Ideas for cost reduction and profit improvement

"I do not want to know 50 great ideas of construction of profit that you can put to immediate use in your business increase profits and reduce costs? "

If YES read all of these ideas that have been carried out by customers and have benefited from their business gives big boost in profitability. Most ideas can be put into action immediately. Each idea has the potential to give many points% increase in net profit.

Research shows increase profits by 4% -56% and reduce costs by 18% -37% within two years by the simple 5 step process called the Profit Model Maps. Usually a 5% reduction in the cost of response is appropriate for more profitable enterprises.

Companies can calculate the value of savings from these two simple formulas

If the company made losses

The costs and total costs = sales + absolute value of the net loss + / – tax say X = income

Minimum savings you will make in two years = 5% of X (as calculated above)

If the company made a profit

Total costs and expenses of sales = net profit + + / – income tax = Y say

The minimum savings to do in two years = 5% of Y (as calculated above)

 

So how much can you save? Improve your earnings?

 

 

General Tips about profit improvement and cost reduction

1. Recycling and reuse. Plastic bags, envelopes and other packaging suppliers that good trash bags. Another example is the normal use wrapped boxes printed on the face of these envelopes in providing traffic information internal mail. Once received, the recipient can return to re-send your mail to another internal business.
2. How about saving and reusing photocopy documents or the impression that there were errors in the copying or printing the document. If these papers contain confidential information lost can be used to write or take notes by staff that the use of notebooks and new notebooks. The ideal is to stop buying new laptops and notebooks. It saves money and the environment.
3. Learn to photocopy and print on both sides of the paper. Buy copiers and printers that can do this with ease and put in a company policy interest all staff to photocopy on both sides of the paper.
4. Insulation for the roof, attic and walls (including exterior wall electrical outlets) absolutely save you money over time. Much of this, you can do yourself. While at it, check the weatherstripping around doors to the outside if you can see daylight between the door and frame – buy a roll of the door foam adhesive seal and close the cracks.
5. Consider the possibility of investing in reusable items. Rechargeable batteries are a good option if your battery consumption is high – the question you should ask yourself is: why consumption battery of high and what can be done to reduce this?
6. Having a no smoking policy or reducing the time snuff smoke. Many staff members spend much time outside the office designated smoking areas. Sometimes, other staff members accompany them jointly wasting a lot of productive time.
7. Limit alcohol at company premises and functions. Alcohol is an additional expense that may be able to completely eliminate or at least reduced considerably.
8. Stop playing in your organization and staff getting together and raising money for Lotto and the deposit Footy! These are personal acts of officials during working hours.
9. Stop using paper napkins and paper towels. cloth towels are more absorbent and can be used over and over again. They also clean much better than paper.
10. Think about every purchase before you do. Ask yourself if you need or simply want. Make something and have to perform the same task? Is it good quality or need replacing after a few uses? Most importantly, are you willing to put away your profit improvement and cost reduction objectives have it? If an item is more, just say no.
11. Use the 24 hour rule. Wait 24 hours before making the purchase for items not critical.
12. If subscribe to non-essential services, such as satellite radio, mentally preparing to cancel the service and then call their accounting department. Tell that you are canceling – which will be transferred to several people, but every time I tell the truth – you want to cancel, because you can not afford the service. If you persist, you offer a discount – a substantial discount – To continue the service because it is much cheaper for them to keep a client to get a new one. If you do not give a discount – Cancel the service and without it while saving money.

Warnings on profit improvement and cost reduction

1. Take into account not only the least expensive option – which is certainly not always the best option. Many, many times, the initial savings will cost more forward. Carefully consider the life cycle costs, plus the cost of acquisition.
2. If you buy second hand, check carefully … this is especially true of cars. It is worth investing a mechanic check the car (Unless you are perfectly competent in the matter – are you sure?).
3. Do not go overboard completely. It's great to be frugal, is not great to be a stingy miser. If staff needs something definitely find bargains, but to maintain their priorities in order.

Phones and Communication

1. When it comes to phones provide the consolidation of all fixed lines, voice over IP and mobile phones. In this way you can rationalize the number of lines and communication methods and reducing costs. You can also use the list of rationalization to negotiate with your service provider or its competitors for a better price.
2. When it comes to cell phones regardless of whether the majority of staff members so require. Again consider the rationalization of staff working in out and need to be contacted by the head office or vice versa.
3. When cell phones are provided with clear rules on their use. Any violation This should be borne by the employee and recovered from his salary.
4. Consider text messages or short messaging service or e-mails to staff in places from abroad or those who can travel abroad with which you may want to communicate.
5. Consider the use of voice over IP as Gchat Skype or Google. For example Skype charges for AUD 4.00 unlimited calls to any landline or mobile in Australia for months. Considering that Optus charges U.S. $ 109.00 per month for the same privilege.
6. Cable TV, consider whether it is necessary for your business. Instead of having cable TV special in your lobby can be a good idea to use the preview. Your customers or providers who use the lobby would not seek to see the full sample or movies shown on cable television during office hours.
7. Understand your traffic patterns and what you spend more than your phone company knows or tells you. Many companies rely on your company to tell them what to do. This is unwise and reflects laziness on the part of the person making the determination. Given the choice, a telecommunications company always sell you a gold-plated Mercedes, whether needed or not, in a lease 50, that only increases in costs per year, which can never get rid of, even after the wheels have long fallen. Do not fall into this trap. You make the rules. It's your money!
8. Package their services in something you can explain to the company market its terms. Measurement of services by origin, type, distance and cost per unit. Make everything up perfect granularity foot absolute level 100,000.
9. Identify the minimum level of services required to meet the needs of your organization. This does not mean cheap, it means that the combination of services you should buy exactly meet their needs, not being greater than or less than their needs. You do not have to pay for the widgets can not be used, and you do not want your users do not have with services that are critical to the success of your business.
10. Identify the companies that provide service in areas where the need arise service. For example, no matter if XYZ company has nationwide service to major cities, if your main city is not on your list. Get compositions reliable market sources. Companies may be telling you the best fare is a nickel, while others may be paying a penny, and never more I'll tell you beyond what they need. Other users make the top has probably the best data rate, which can informally exchange. Be sure not to look only the main types that are usually applied, but look at the full list of services. Recognizing that the largest firms with more volume does not necessarily pay the best prices. They often suffer from contracts that have been ossified later after too many "good business" type have been cut. Carriers will always be faster include others who are paying more money than they are. Do not worry, just to mention the highest, keeping the ones getting a good deal private.
11. Invite all companies to compete for your business that has even the slightest chance to win your business. Even if only a single circuit. The more the better. Do not invite to the carriers would not seriously consider business, which is called using "horses of harassment." If you this, the market will not respect you. Do not give to the holders of any advantage that all other firms not receiving. That is fair. Use a level playing field. Making all in competition with the same information, released at the same time and under the same rules. Do not give anyone more time than you could do inside. Abra information from all private companies, sharing with the minimum number of necessary internal people to do the job. The more people know internal influences, the more we will share with the market, and not for their benefit.
12. Set the pace. The incumbent will use excuse after excuse to delay the process. Why should help accelerate the process that will only result in having to write some of the benefits of fat that are doing in your business? This is not a time for nostalgia. Establish the terms, timetable, and the award to companies that earn their business. Not in the past. In the present. Once you have tentatively identified a company, make sure to get a list of other 2 or 3 may also be sufficient. Never tell carriers what is the outcome until you have your signed contract. It is a very small supplier community, and your information will be shared (again to his detriment) if we disclose before the deal is done.
13. Measure everything and the report of its success rate to executives so they can understand its operation.

IT Department of Telecommunications Cost

1. Your IT department must keep costs in connection systems, including circuits WAN, T1 services and other telecommunications services used for remote office connectivity.
2. Identification of costs – Prepare a physical listing all of the data line, circuits, etc, instead of remote office connectivity. Include information that will help you assess the service needs subsequent appropriate, such as location, broadband, and the number of users on the site. Make an inventory of all telecom expenses of your company recent telecommunications bill. Telecom costs may be as high as 1-2 percent of income or more depending on the composition of your business. Office changes growth by acquisition, and other issues can create situations in which there are "ripe fruit" by inspecting what you're paying. Reconciling invoice details with the inventory listing of telecommunications connectivity created in the first step. That is, compare what you think you have with what you are getting charged for. For large companies and even smaller with many offices, this is no small thing. So get ready for an intense project or seek outside help from those who do against telecommunications bills for a living.
3. Total all of the circuits and lines are no longer in use or can be removed. Measure this with the potential savings are by reducing the bandwidth of certain back office services while still providing adequate response time.
4. Saving opportunity exists at: lines, circuits and does not use or need, the ability to consolidate remote operation services, the ability to reduce bandwidth while maintaining acceptable processing speeds.
5. High-growth companies with many offices often have services in place or latent more capacity than needed in many places. Also if you are not reconciling invoices relating to the data, which is almost always paying.
6. There are many companies that focus on the identification and recovery of costs for your business. One advantage is that these companies pay or fee is based on the results of U.S. dollars recovered or saved. His approach helps a company in three ways: the analysis of burdens of the past and recover overpayments. This can be up to a year or more of the overpayments and may be a specific amount depending on their environment and history of the company, reviewing and negotiating contracts with suppliers to establish use appropriate contracts, assess current needs and recommend cost-effective telecommunications solutions.

Heating and cooling

1. In many parts of the world, and Australia in particular during the summer the temperature rises to extremely high limits. It can be a good idea at this time to harvest solar energy and use it for heating and cooling needs. The government also offers many incentives and rebates to spend the use of solar energy.
2. During the summer season can be a good idea to change working hours for employees working in certain workplaces and area of the plant where the temperature is raised to very high levels can start early and before the temperature rises. Alternatively important work can take place during night shift.
3. Install ceiling fans as possible. This was the method used before air conditioners came. This is a great way to save heating and cooling costs.
4. Open the windows. Unfortunately, many office buildings can not open the windows because it has been closed to exterior. These buildings rely on electricity to keep the temperature inside and lighting needs. Organize to open the windows not only reduce heating costs, but also of enlightenment.
5. If your heating system works gas that can be able to talk to your service provider and request an off during the warmer months. This will help you save on fixed costs. If this is not possible for you to enroll in a pay as the use of the package.

Electricity

1. Use energy efficient bulbs. Again the government offers many incentives and rebates to reduce the overall costs of these energy efficient light bulbs.
2. Install systems and methods in the zones bulbs certain off automatically. I've seen in some areas where security lights or lights are lit at night and forget to be disconnected in the morning. Have a system that changes off the power supply to these security lights or during the day makes the automatic system and save considerably on electricity as these lights consume an enormous amount of electricity.
3. Application and educating staff to turn off and turn on all electrical equipment and laptops before leaving office at the end of the workday. Many people do not turn off electrical equipment and laptop computers when not in use. The main reason for this may be convenient for them, but not for business. Routine checks should be made to ensure that this policy is enforced. This not only saves electricity, but also reduces the risk of electrical fires when staff is not available for management.
4. Application and educate their staff to use only electricity when absolutely necessary. Many offices can use natural light during certain seasons and times of day. This also applies when the window opens for regular its internal environment and temperature.

Water

1. In certain areas of work for workers have a shower before beginning work or after completion of works. If showers are provided kits to reduce use of the shower. Again, these reduction kits shower are provided by the government and if not many incentives are available for your use.
2. Application and educate their workers to limit Shower time.
3. If no toilets and toilets have two buttons for half and fully discharge the color change or install. This will save large amounts of water during the year or in the long term.
4. Knights bathrooms should be equipped with proper urinals. This new way of water flushed down toilets and toilets.
5. Whenever possible use buckets of water saving urinals. This is a new invention that does not have to use water as the buckets are capable of purify the environment and urine by using chemicals to kill the odor and bacteria.
6. Use faucets that automatically stops after dispersing a limited amount of water. This is a good idea when you have people wash their hands in public restrooms. If more water is required all you need is to press a button. This figure exceeds the use of excess water and leaks.
7. If possible use waterless hand sanitizers.
8. Repair leaking toilets and faucets.
9. Use compost and other reduction systems and water your lawn in office, such as drip systems and providing additional nuances to reduce evaporation.
10. Reduce watering duration and the number of days you do weekly.
11. If your company uses water in the tanks full, use shade covers added to reduce evaporation. Some companies have swimming pools in recreational buildings that may require the same treatment.
12. Learn how to harvest water rain and store in large tanks. You will be able to use this and save a ridiculously large amount of cash to spend on water.

Entertainment

1. Failure to provide free tickets and corporate boxes for many sports events or other in the roles and activities.
2. When officials have food and entertainment allowances set daily limits.
3. Even when senior officials can have food and entertainment allowances have clearly defined policy on how money can be spent and for what purposes can be spent.
4. Request Educate staff and not to order food by delivery or room service.
5. The company must have a system in which the agent first uses your credit card staff for food and entertainment that will later be reimbursed by the company's actual invoices. If the official can not provide the appropriate documents support and bills or has spent on items which have no company policy permits the payment will be withheld or paid net.
6. Stop buying or rationalize the purchase of newspapers, magazines, periodicals and books for the management and staff to browse and enjoy during office hours.
7. Do not order flowers fresh for all managers in the office. You can use fresh flowers on the reception or in the main lobby area and even better if you can use natural-looking artificial flowers and floral arrangements that are kept clean and free of dust.
8. If the company offers annual trips to all staff members should always be based on reduction of costs and benefits improved during the year in particular. For example, you may be able to tell your staff that if some costs are reduced by 20% would rewarded for this particular business trip. If not you dont have to spend that money. However, if staff are able to reduce costs as requested, you can win anyway
9. Some companies have a habit of taking their key management to exotic places in far away places for a few days to brainstorm and develop corporate strategies. Although I do not condemn this great idea that may be better to reduce the cost to have fewer days with a busy schedule and less travel to do.

Purchase of assets and their use

1. Many departments purchase new furniture and equipment whenever necessary or within the limited budget without further reflection. Before deciding to buy new items to look carefully at the furniture and equipment that may be in storage. This is possible when Many organizations today closedown facilities and dump the furniture and equipment storage facilities. This is effective but you will need the support of their accounts staff must keep a record of all fixed assets and have full control of their movement.
2. Before shopping assets may be a good idea to ask other departments or other strategic business units if they have these assets and you could buy at lower costs, or perhaps even share. This not only save money for your department but also help the sales or the distribution department to reduce their own costs.
3. If you are a small start-up company may be able to buy most of their assets from garage sales or auctions closedown. Even if you have to spend a little more on the renovation and cleaning up you could save substantially on them.
4. Another option that most companies think now is for the purchase of online auctions and stores like eBay.com overstock.com

 

Food and drinks

1. Reduce the variety of coffees, tea and milk purchased for personal use. Many companies have a habit of buying different types and brands of coffee, exotic and different blends of tea and milk to meet the fantasies of every staff member. In doing so the company will incur additional costs in the purchase of small quantities of a variety of items. You may be able to ask for suggestions from the staff before making the change. Reduced range practice at all levels.
2. They always have limits on orders individual. Do not buy large quantities or in bulk. Just enough to buy, maybe one or two weeks. This will not only reduce theft, but also the deterioration is very possible that certain foods and drinks have expiration dates.
3. Eliminating certain aspects of their food and drink lists as free cookies, fruit, nuts, soft drinks and refreshments for your staff.
4. Install a water purification system for drinking water instead of ordering bottled water. Keep purification system in good condition.
5. If your company has a tradition of offering free breakfast during certain days of the month or a roast is a good idea to limit the number of days this is done in a month. They also have a fixed limit on the amount of staff can pass on these occasions.

Automobiles & Related Costs

1. Ask your staff to always consider, "this trip really necessary?" When This question may be able to seek other options such as shipping the product or package by mail, is delivered in the right place on your way home, etc.
2. Request personnel to work together to consolidate trips or to reduce the extra trips made during the day. I have seen staff from various departments to travel to a site in particular, at the same time in different vehicles. Worst of all you will see that each department has its own car for these trips. Not only has this phenomenon among departments, but also you will find this among staff working in a particular department. Staff members may go to a specific location but has no plans to organize the sometimes together so they may be able to do that by sharing a journey. For example, officials in particular may be leaving a customer location at eight and another member to leave 10 minutes later to a place on the same route. Of course I understand that it is not possible at all times. However what is important to note is currently there is an active method of planning and organizing visits to workplaces.
3. Always check the tire pressure of vehicle. Check the spark plugs. Use new or good quality oil for vehicles. All these measures will reduce the cost of maintenance and operation.
4. Consider keeping a log and track how often and how far you drive every vehicle industry. This way you will be able to negotiate reduced insurance.
5. Less driving also saves maintenance costs, tires, consumer goods and fuel.
6. Application and education staff to change their driving styles ideal speeds and less aggressive driving. In this case you should save on maintenance vehicles, supplies and fuel.
7. Staff who travel long distances should give special or advanced driving lessons. Accidents happen that can cost the company a great deal of money and personal lives. Set limits on the amount of driving hours permitted for a period of 24 hours.

"How personnel costs without adding more costs

1. The factor productivity "Obviously, one of the ways any manager can accomplish more with existing resources to improve the productivity of those resources. Improve staff productivity is an ongoing effort and is important for the employee, your company, and yourself as a manager.
2. Train and develop employees-Target specific training opportunities for each employee that helps them do more. Training can be internal programs that cost little or nothing more than the time of the elderly. Or you can use programs from outside vendors who can teach specific skills for the employee to improve their production capacity.
3. The coach and the approach employee efforts, too often, we allow our employees to "find their own way." Be more active in the delineation of responsibilities the employee, focusing its efforts on important tasks, and training for their higher productivity is a good thing. Expect higher productivity and often will get it.
4. Our employees want to give them tools to be productive and product quality results. Invest in your employees, giving them the tools increase their productivity.
5. Incorporate a program of quality improvement-often used productivity is hampered by poor quality the provision of their efforts. More than not, they can not see the problem is the "can not see the forest for the trees" problem. For example, if your staff programming had to fix a lot of problems that are discovered after software enhancements are put into production, there is both a customer service problem and a problem productivity. Every time I have launched a program to improve the quality, I found the resistance of my highly educated people. Only after showing the numbers before and after the program quality is what you really believe it improves the output of the computer.
6. Provide additional incentives for a more-In a couple of situations have a huge backlog, need to reduce the level of backwardness, but do not want to hire more people. To tackle the problem, provide incentives staff to work on extra projects "in his own time", meaning outside of normal. This type of program can be very effective, but beware not to create the impression that you're paying for overtime. people per hour overtime charge for non-professionals. Also just want to authorize work additional to those that are doing an acceptable job, ie how to qualify for the incentive to work is doing his normal job as well. Use a program and only in short bursts of three to five months, compared to allowing it to become a normal working program.
7. The factor of perception - Improving your personal productivity can actually be achieved by changing the perception of team productivity. I am not advocating any kind of deception, but there are things you can do to make the team seem to be more productive.
8. Organize customer service to create a structure and set in motion processes helping their employees to quantify issues, implement change in an orderly manner, an escalation applicable the problems and continue on a regular basis. Improve customer service form automatically makes your computer appear to be more productive.
9. Manage customer expectations to their capacity-If your computer is too committed to the capacity which can result, the natural conclusion will be that they are not getting the job done. Manage your customer's expectations and the actual capacity of his team for the delivery and you will see that the team is more productive. We should be managing this way anyway, but it's easy to have too many commitments.
10. Refine the portfolio of application in their department-Review of applications which come to your department stakeholders. Very often, applications made for items that are not needed or that do not provide real business value. The reduction in the accumulation and the establishment of more stringent approval requirements for New applications can create a perception of a better response.
11. Over communicate, communicate the status of outstanding issues over than they have been. Nothing makes a customer feel more frustrated than not knowing the status of a support issue or pending application. Keeping your customers and users "in the light" creates a perception of being more productive and improve customer service.
12. More Delivery-Train your staff to take additional steps in support of its stakeholders. little extras go a long way towards improving service and greater satisfaction creates a picture of the responsiveness and productivity.
13. Post your team's accomplishments, might surprise you how much we all forget what we did each month. It is very easy to get caught in the problems day to day problems that we forget to reflect on the things that were completed in the past. Start Tracking the progress of his team and publish the most Featured monthly. If we forget what we did, I can guarantee that customers do not know all the things we do. Share this knowledge with them, and customers may are genuinely interested and that their view of how busy you are in your department or business unit goes up.
14. Before you start trying to improve productivity of staff, conducting an assessment to determine how productive they already are. If possible, establish a baseline and measure improvements as we implement specific actions that either improve the real productivity of your team or the perception of their productivity. The capture of actual data in key areas will help prove what is really going on.

 

 

Conclusion

 

The more to understand the power of this list, the more you realize that they must get their hands in all other ideas to benefit your business. Go to href = "http://www.profitmaps.com.au/"> www.profitmaps.com.au obtain and use a simple 5 step process that can do this for your business.

As mentioned every idea has the potential to increase its net profit margin points for many%. Research shows the benefits increase by 4% -56% and reduce costs by 18% -37% in two years. In general, a 5% reduction in the cost change is suitable for more profitable business.

To get the maximum benefit and ensure that actions resulting improving their bottom line that needs a structured methodology or process in an ongoing basis, such as the five-step process is suggested in www.profitmaps.com.au .

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