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Cutting back without sacrificing the "must haves"

It is always a painful decision to cut costs for almost every company, especially when you need to start cutting back on staff members and employee benefits. How can you start cutting costs without sacrificing the must haves of a company? Here are some tips to follow:

Tip # 1 - Operating hours
If you really don't want to fire your employees, but you need to cut salaries, re-structure your business hours. Several state agencies have implemented four; 10-hour workdays instead of having their employees work a traditional 8-5 work week. This is because closing the company for a 3-day weekend saves them enough money in energy and operational costs to keep their staff members on full-time and they do not need to let anyone go. If you can't seem to reach some of your target customers during 8-5, change your business hours from 10-7 or 6-3, this way you can reach them when they are home. A lot of companies are switching to 6-7, this way their staff members have flexibility with their schedules and the company is able to reach all of their customers.

Tip # 2 - Advertising Expenses
No one really wants to cut back on their advertising budget, but it may be the only choice you have. If you are not breaking even or getting a nice profit from your advertising, cut back on your advertising costs. You can still gain as much exposure, just do it smaller. This means taking out a quarter page ad in the Sunday newspaper instead of a full-page. Maybe you should try a 15-second radio spot instead of a full 30-second commercial. Whatever you try, make sure you are saving money and still getting a return on your investment.

Tip # 3 - Cross-Training Employees
It is inevitable that you will go through an entire year without at least one employee calling in sick. What happens when they call in sick? You either need to call a temporary employee or your healthy staff members are forced to pick up the slack. Cross-training is done by a lot of companies because it can save you from calling temporary help. Cross-training simply means you will train other staff members to step into multiple roles. For example, if you only have one person in the distribution center and they call in sick, you need another person to step in the distribution center to fulfill the daily orders. They don't need to dedicate their entire day to the distribution center, just a few hours to fulfill the orders and package them. Take a look at your staff members that have lighter workloads and cross-train them to help out when others call in sick.

Tip # 4 - Watch your accounts
One area you always need to watch is your accounts. How much money is coming into the company and how much money is going out? Where can you cut back on the money that is leaving the company? How can you increase the speed in which your customers pay you? Slow-paying customers can sink a company so you need to send them an invoice as soon as possible and include the payment terms on the invoice. Another way to get the cash is to ask them for a down payment when they purchase products from you. Let them know you need at least 10-15 percent of the total payment before you will ship the product. Normally this amount will cover your break-even costs and it will keep you out of the red.

Tip # 5 - Generic brands
While you may not like the Bic brand pens as much as the Pilot gel pens, they are a lot cheaper. Look at all the products in your office and switch to the generic brands to save hundreds or thousands of dollars.

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