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Cutting costs without firing employees

It is never an easy decision to fire employees, so how can you cut costs without firing employees? Here are 5 things you need to consider before you give your employees the boot:

  1. Transportation costs

  2. Tangible costs

  3. Advertising and Marketing

  4. Cash flow

  5. Training

Take a good look at your transportation costs. How much money are you paying vendors to ship products to your company? How much money are you paying transportation companies to send your products to your customers? Are you charging your customers enough money to pay for the transportation costs? Do you have salesmen that are on the road a lot? Some easy ways to cut down on your transportation costs are to price shop, quit driving, and charge more. Starting with the price shopping, contact multiple transportation companies and tell them how much you are currently paying and ask if they can beat that price. Keep your current vendors on their toes by telling them that you are price shopping; this may force them to drop their costs. Now, how many salesmen do you have on the road and ask yourself if they really need to be on the road. Try web-conferencing over face-to-face sales meetings, you can get the same message to your clients and you don't need to drive to their facility to do it. Another way to save on transportation costs is to increase your prices for the customer. A few cents isn't noticeable to most customers but it will really add up for your company.

What about the tangible costs? Your company probably uses a great deal of paper, ink, paper towels, toilet paper, water, and other general items. Make a list of all your tangible costs and start eliminating some of them. Switch to generic brands, they are a lot cheaper than and normally just as good as the store brands. Contact your phone provider and negotiate with them to lower your bill. Set-up your computers to receive faxes, this will eliminate the need for an extra line for the fax machine. Try using a VoIP phone service instead of a traditional phone line.

Advertising and marketing cost a lot of money and this can really hurt your company if you are not breaking even or gaining a profit with each campaign. You don't need to cut back on adverting and marketing entirely, just a little bit here and there that can add up to hundreds of dollars a month. If you aren't getting the hits through pay-per-click advertising, switch search engines or try other online advertising methods that will produce money.

Your cash-flow can really hurt your company if you do not maintain it. If you have slow-paying customers, start charging them interest or require a down payment when they order the product. Make sure you are monitoring your cash-flow constantly to avoid going in the red. Send out monthly invoices to your customers and highlight the amount they owe and the date it is due. If you don't receive a payment that day, send another invoice to them to remind them to pay their bill.

Another way to cut costs is to consider the training your employees have. Do you waste time when you train them? Instead of keeping them in the office for an extra hour, send them home. Use every minute of the training time and make sure your employees are actually learning something. You should also consider cross-training some of your employees so they know how to perform the job duties of other staff members when they are ill. It is an easy way to save money and it can help you avoid wasting time training a temporary employee to fill-in while the other employee is out of the office.

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