What are some ways of cutting costs in a business?

cutting overheads eg overtime
taking advantage of discounts (ie settlement discounts & bulk/trade discount) and at the same time enforcing collection of money due on credit accounts
buying incentives (may not reduce costs but could increase profit)
re-shuffling staff
doing efficiency checks
shopping around for best deals going / changing sources/ changing suppliers

noticed a few people suggesting cutting back on stock. be advised that this can be risky as it could lead to loss of sales/ customers which wont help. whilst stock is your most valuable expense to say it does come with other attached expanses eg warehousing. stock flow should be carefully monitored before making this decision as it could prove disastrous. ie check current stock, over turn rates, holding costs perishability demand, market trends etc.

Reviewing your systems and processes. Look up something called Lean or process review.

Basically it's about evaluating your business looking for blockkages and waste and identifying what you can do about it. It's a bit labour intensive - but potentially worth the effort.

Look here:
http://www.institute.nhs.uk/quality_and_value/lean_thinking/lean_reviews.html
as a starting point.

and here:
http://en.wikipedia.org/wiki/Lean_manufacturing
for an overview.

reducung staff / hours
increase energy efficiency
cheaper supplies

Effective and streamlined systems.

Take a very careful look at your cost base. Some examples include:

1. Use 2nd class post not 1st - it is fine for most correspondence.
2. If you have a high volume of post use a franking machine as the postage costs are lower
3. arrange meetings so that you use the train for travel off peak instead of peak times
4. dont use taxis unless absolutely necessary
5. any subscriptions and memberships that dont generate value
6. Look carefully at your marketing spend. (A few years ago I did an item by item marketing audit for a business and halved their marketing spend with no difference to their effectiveness).
7. Budget carefully and dont spend above your budget. Lots of companies will ring you up trying to sell you stuff offering you a 'good deal' - dont go for it unless you need it and it was in your spending plans anyway.
8. manage your utility spend - can you get a more cost effective deal (Utility Warehouse is very hard to beat on a consistent basis).
9. If you have an office, do you need it? Or can you work from home?
10. Can you rearrange your salary structure using salary sacrifice schemes and replace it with more tax efficient ways of remunerating your staff (e.g. childcare vouchers, mobile phones, extra holiday, etc). This will save you a lot in National Insurance.
11. have you got surplus space/kit to sell or rent out?
12. Are you paying for kit you dont really use - if so, get rid of it. It can sometimes be cheaper overall to hire kit you use infrequently rather than own it.
13. Negotiate hard on prices. Be creative on financing deals, part exchanges and even barter.
14. Get smaller motor vehicles. Look at lifetime costs and if you have high mileage petrol vehicles look at LPG conversions. If you have high mileage diesel vehicles look at chip fat conversion.
15 Double check your fuel and resource efficiency and recycling schemes. Are you paying for stuff you are throwing away/wasting?
16. Use virtual services wherever possible (e.g. telephone, VOIP, VA, etc)
17. Look at your personal expenses - can you cut back, or even flip them legitimately into the business - which may restrict your ability to use them but can help with your wider cashflow position.

One of the best ways of improving your profitability is actually to increase your margins as well. You can raise your prices even in the current climate if you pitch it well.

Also remember that you are doing it for YOU - at times like this profitability is actually not very important. It is all about cash flow.

Given the seriousness of the economic situation, I think we should all remember the immortal words of Eric Idle

"When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...
And...always look on the bright side of life... "

Move to a cheaper premises

Reduce your staffing levels

Carry less stock

Try to reduce wastage of materials/unecesssary phone calls

If you sell on credit make your buyers pay quicker for your products and reduce bank charges.

Sell any unused machinery

Ask your employees opinions on ways to save money/reduce costs.

I have run out of ideas now, hope the above helps.

Get rid of staff, find a cheaper supplier of your stock,

Lay off employees
Cut benefits
Reduce inventory thus borrowing expenses
Advertise less
Travel less

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