One of the smartest things you can do for your business is to be strategic about the types of cost savings that may help you improve your profitability. To that end, you may want to consider brainstorming as many cost savings ideas that you can. (Whether with team members or going solo.)
An idea generation tool that can be useful in this process is SCAMPER. SCAMPER is a brainstorming technique that can help you explore an issue from seven different directions. If you're stuck for ideas on different types of cost savings beyond going paperless, cutting shipping costs or reducing travel time, a structured method like SCAMPER may yield unexpected ideas.
In brief, the SCAMPER acronym stands for:
- Substituting something
- Combining it with something else
- Adapting it
- Modifying it
- Putting it to some other use
- Eliminating it altogether
- Reversing, rearranging or revising it.
Let's look at examples of cost savings tips spurred by this seven-letter acronym. You can use all seven categories or just one, and you don't need to use the categories in sequence.
What can you use, or do, instead?
One of the simplest types of cost savings is the office software that you use. Software costs and licensing fees can add up.
You may want to switch to one of the many free software options available, such as LibreOffice, Freeoffice, and Microsoft Office Online. Whatever you decide, make sure you've evaluated that the free option is the right choice for your company's needs.
When evaluating other types of cost savings, don't forget about your car. You could save money by using a shared car service instead of a company car. Many companies offer this type of service, such as Zipcar, Car2go or Enterprise Car Share. You may want to investigate other companies providing this service to find one in your area that is suitable for you.
What processes, products or people components can you combine for cost savings?
Among the types of cost savings, insurance can be a fruitful area to explore. Do you use different insurance companies for your business and home insurance? Contact your insurance company to ask what you could save if you combine your insurance services under one umbrella. If you have a home-based business, you may be able to add a rider on your homeowner's insurance that may result in savings.
You may also want to look at your electricity as another source for cost savings. You could lower your air conditioning costs in the summer by installing ceiling fans. Ceiling fans used in conjunction with your air conditioner can result in some cost savings. According to Energy.gov, if you use air conditioning, a ceiling fan will allow you to raise the thermostat setting about 4°F. Over time, this can result in significant cost savings.
What ideas from other businesses can you copy or emulate? Many types of cost savings can be realized simply by looking at what other industries are doing.
Some newspapers, for example, shrink their page size in order to cut newsprint costs. What inspiration can you derive from this that you can adapt to your own business? For example, if you're running a food business, can you make a thinner pizza crust or smaller muffins? Can you switch to slightly smaller containers for take out food?
You may want find inspiration from stores that use non-commissioned salespeople. This can free up the sales personnel to focus on the customer relationship without the pressure to sell. By adapting your business to hire non-commissioned sales people, you not only save on commissions but might end up with a workforce that focuses on enhancing the customer experience and building loyalty.
What can you change that will result in cost savings?
You may be able to see cost savings by changing your vacation policy to offer employees a mixture of paid and unpaid leave. A few days of unpaid leave during quieter times—tagged onto paid leave—may appeal to some employees who might welcome the opportunity to have some personal time off without giving up their jobs.
If you haven't ventured into online selling, you might like to consider modifying your approach by adding an online storefront to your business. You can cut costs by getting started in e-commerce for free with companies such as Prestashop or OpenCart. You can also explore setting up a custom store front with eBay or with Amazon Web Store.
Put to Other Use
What are new ways you can use something to reduce costs?
When exploring different types of cost savings, think about what you have that can be put to other use. For example, you may be able to rearrange your store or office to free up some space that you can sublet. This may help you save money on your office space costs.
Do you have a receptionist or other staff member answering calls? Why not put that person to better use to help you in other vital areas of your business? Instead of a staff member answering phones, consider one of the many services such as eVoice, Grasshopper or RingCentral, which may save you money on salary and on-site automated voice systems.
What can you streamline, dispose of or eliminate altogether?
Other types of costs savings involve office furniture and equipment. As an example, you could eliminate the need for a dedicated desk for each person. If you employ part-time staff or offer telecommuting, consider hot desking—that is, the practice of having unassigned seating—as a way to save money on furniture and equipment.
Are there any items you have in storage that you no longer use? Are you carrying obsolete or unused inventory? Are you stuck with returns? Are you holding on to inventory from cancelled orders?
All of these may be a source of cash that can help you with saving costs. For example, if you've upgraded your printer and are left with expensive, unused cartridges, contact a company to sell them.
What could you do to reverse, rearrange or revise the way you do things now that can help you save money?
You might consider a reverse auction for any goods or services that you buy, such as office supplies or repair operations. In a reverse auction, the role of buyer and seller are simply reversed. That is, sellers compete with other sellers to get the business from a buyer. In such an arrangement, you, as the buyer, may be able to snag a lower price for a product or service as sellers strive to underbid each other to get the sale.
Adopting this practice may prove to be one of the most fruitful types of cost savings. Not sure how to access reverse auctions? Explore GSA Advantage!, Unieauction, Procuresens or Sellacious to give you a head start. You could also conduct a search to find out similar sites that best fit your situation.
If you reimburse your employees who drive their personal cars for business, don't forget to review the mileage rates on a regular basis so that you can revise the rates when fuel costs decrease. It's easy for a busy business owner to neglect this area of potential savings.
SCAMPER is a tool that can prompt you to look at an issue from different angles. It may challenge you to think creatively and come up with fresh ideas to help you in realizing as many cost savings as you can. Give it a try to find different types of cost savings within your business.
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