The Bottom Line Group is a leader in the field of cost reduction. Our goal is to help your company recover hidden overcharges from your invoices and look at every possible way to save you money on the cost of doing business. Our clients reap the benefits of our expertise, insider knowledge, and proven track record.
Reasons To Hire a Cost Reduction Consultant
For some business owners, conducting a competitive bidding process is an alternative means to reduce costs for the company. However, it is there are more acceptable methods of reducing operational costs that are more precise, intense, and detailed. A professional cost reduction consultant will present clients with several options that they identified to be suitable for application in your business.
Generally, cost-cutting concerns are extensive processes that require the triangulation of the best suppliers. The cost of ownership, reliability, and quality should be balanced when the business is pushing for a reduction in its operational costs. There are cases when the least expensive costing supplier fails horribly in reliability and quality. So, the adage “you get what you pay for” is generally true when it comes to business resources. Moreover, the highest level of reliability and quality from a supplier may come with a substantial premium for its impeccable service. Experts in cost-reduction may be able to find alternatives with a similar level of reliability and quality with a competitive cost of ownership.
Another good reason to delegate cost-cutting concerns to the experts is that they are great at renegotiation with your current supplier. There are instances when you are happy with your current supplier, but because of your cash-flow crunch, you might want to apply some changes or limits, and your team of cost reduction consultants can do the renegotiation.
Apart from giving you recommendations on cost-savings based on the unique categories of your business, a cost reduction consultant will also help you implement measures quickly. And with faster implementation, you will feel a significant improvement in your cash flow sooner than you realize it.
Lastly, most firms offering cost reduction consultations charge based on the amount saved that they have identified for your company. Some business owners are hesitant to try out these types of services. But knowing that they are reliable and even more cost-savings for the company will help your business flourish in record time.
Quick and Significant Cost-Savings Impacts Business Operations
Small businesses have a limited overhead margin for their operations. It means that every dollar saved is equal to 10 dollars earned. Thus, if you will identify $1000 worth in cost savings during a cost reduction consultation and analysis, then you have to increase your sales by $10,000 to achieve the savings equivalent for the bottom line.
With the right cost reduction consultancy, you can generate more in annual savings. Experts will consider everything about your business to create a comprehensive expense reduction analysis. These people will give you pointers on where to make adjustments to reduce cost-effectively. And when you have succeeded, only then will you compensate them based on the amount you saved.
The Cost Reduction Process for Small Businesses
Each business may apply different processes for cost-analysis and cost-cutting. But in most cases, it all starts with a compilation of all business expense statements. A cost reduction consultant will gather information and identify the business operating expenses so that they can create a comprehensive cost-reduction analysis that is unique to your business.
The next process that most cost reduction consulting firms take is to analyze the operating expenses of the business. To maximize savings, consultants will take a look at all the aspects of your overhead, such as Office Machine expense, human resources administration costs, finance and accounting costs, marketing and advertising expense, telecommunication expense, insurance costs, and many others.
Once all of these expenses are taken into account, cost-reduction consultants will draw up recommendations on the cost-savings and expense reduction measures that they identified. The consultants will complete their analysis and meet up with you to discuss the things they have identified, present their recommendations with you, and plan the implementation process with you.
The last step that cost reduction business services will take is to help clients implement their recommendations. Of these experts will not leave you hanging. They will assist you as you act on the cost savings opportunities that they have prepared for you. If you are not comfortable implementing some steps, the firm will provide a specialist to work on your behalf in implementing these cost-savings measures.
SImple Cost-Reduction Strategies You Can Use For Your Business
Cost-reduction strategies for businesses generally go beyond the pure conduct of competitive bidding processes. Hiring the right firm to help you cut costs in your business operations will expose even more means that you can explore. Some other expenses are saving methods that cost-reduction experts find involve technological improvements, behavioral modifications, correcting billing errors, rate reduction from suppliers, savings from alternative providers, elimination of unnecessary services, and more.
All these things may be simple, but a few tweaks and changes can make all processes more efficient and smooth-flowing. More so, corrections and eliminations of unnecessary services can reduce significant expenses without you losing any essential services. And finally, you save more as your expense reduction consulting leads to more competitive suppliers so that you have choices with the same quality, reliability, and reduce costs.
The Bottom Line
In most cases, small businesses hustle to meet their cash flow margin but still find their efforts lacking. To save time, energy, and money, hiring expense reduction experts in cost analysis and cost-cutting will give you significant results at half the time. Imagine what you could do with all the extra cash once everything is adjusted to be more cost-efficient and geared toward revenue generation.
- Meet with client for a solid understanding of needs and concerns.
- Identify the areas where pricing or quality could improve.
- Collect your most current month’s invoices for each expense.
- Obtain additional account detail from each vendor.
- Go back up to 36 months and audit vendors to identify possible invoice errors and over billings.
- Identify all areas where past savings can be realized.
- Meet with all vendors on your behalf to secure refunds and credits for past billing errors.
- Get refund issued in form of a credit, check, or reduced rate moving forward.
- Perform a thorough rate analysis of vendors specific to your industry.
- Determine how competitive your current pricing is.
- Obtain bids from possible alternate suppliers pre-screened as being both reputable and competitive.
- Interview suppliers to determine what steps they take to keep client costs at a minimum.
- Establish unified purchasing for greater buying power.
- Consider the use of alternate products that would meet the same needs with greater efficiency.
- Consider streamlining processes for greater efficiency.
- Provide a report detailing the entire rate analysis process.
- Formal presentation of the expense reduction process, savings recommendations, and points of interest.
- Implementation of savings recommendations.
- Work with current vendors and / or alternate suppliers to establish possible new service.
- Educate your staff when there are changes to service.
- Provide free training if new procedures and policies are to be implemented.
- Communicate with your staff on a regular basis to ensure the quality of service consistently meets expectations.
- Monitor your monthly invoices.
- Seek out additional savings opportunities on an ongoing basis.