Resolve to Reduce Costs in 2012
When the rush of the holiday season dies down, many businesses will find they are making fewer profits. This is the perfect opportunity to approach your suppliers – telecommunications, janitorial, utilities, etc. – and request a reduction in pricing.
“This is the slowest time of year for many businesses, but it’s also the time when people start to examine their budgets and plan how to manage costs for the upcoming year,” says Leonard Levey, CEO of National Cost Reduction Corporation.
“I’ve found that more often than not people are paying too much for their basic administrative expenses like in and outgoing freight and office supplies. Simply negotiating lower prices with suppliers will free up a large sum of money within a company budget.”
Cost reductions should begin at the stock keeping unit (SKU) level and be measured in dollars, not percentages. This will give the most accurate perspective on expenditures. Once you have your expenses outlined at the most basic level, talk with your suppliers about lowering your prices – they would rather negotiate their pricing than lose a customer.
“A five percent reduction here and a 10 percent reduction there can work out to huge savings,” says Levey. “When we create a cost reduction analysis, we look at over 20 expense categories down to the SKU level, and we almost always find items that will reduce costs.”