24 May INCREASING TURNOVER WHILE REDUCING RUNNING COSTS
It may sound like an impossibility, the holy grail of marketing gurus perhaps, but contrary to popular belief, it is entirely possible to increase the turnover of your company at the same time as reducing your overall operating costs. It is no easy feat but by thinking outside of the box and taking full advantage of new technology, along with the outsourcing possibilities available to modern companies, it can be done. If your company is at a crossroads in its history and needs to cut costs ruthlessly while ensuring that revenue heads in a northerly direction, consider the following points carefully as you formulate a plan of action.
A 5-Point Plan to Boost Revenue and Reduce Overheads
Below are 5 points that, when considered together, will help you to put together a roadmap for the future of your company that results in higher turnover and lower operating costs. How important each point proves to be will depend on the type of business in which you are involved and the current economic outlook for those areas in which potential customers are based but each one is sure to come into play to a lesser or greater degree.
- Modern Technology – There are a number of ways in which modern technology can help the average company to cut costs almost immediately, such as the adoption of a GPS tracking system for your fleet of delivery vehicles. Simply knowing exactly where each vehicle is at any moment in time and being able to merge this information with the geographical location of customers awaiting their orders will enable you to plan routes more efficiently, saving money on both fuel and man hours. Other examples of using modern technology to reduce running costs include the digitisation of your accounts system and using instant messaging applications to communicate with your mobile sales team over the internet instead of making regular telephone calls.
- Outsourcing – You might think that a sudden increase in the number of telephone enquiries that your company receives will result in a commensurate increase in wages, as you take on more staff to field the higher volume of calls. However, if you outsource your call handling functionality to a company that provides professional telephone answering services such as Netcall Solutions, this will not necessarily be the case. In many studies, it has been shown that outsourcing call handling functionality can actually result in a reduction in costs, even when the number of calls being received is increasing. Even if you only use an outsourcing partner to handle the calls your in-house team cannot answer, you are almost certain to reap financial rewards from your decision to take advantage of a reputable call handling service provider.
- Temporary Staff – For companies that are involved in manufacturing products, temporary unskilled labour can help to reduce costs when demand for those products is high. The alternative, which usually involves paying full-time members of staff a premium rate for working overtime, will be more expensive in almost all such cases. For those organisations that are providing a service rather than a range of products, temporary labour may still be utilised in certain departments but it is inadvisable to rely on untrained, temporary staff to deal with core functions. In sales and consultancy departments, such workers can be employed as assistants to existing employees but never in customer-facing positions.
- Training – As your company expands, it is inevitable that the workforce will expand as well. By using the suggestions above, it will be possible to manage this expansion in a fiscally responsible manner and, by training existing staff to take over more senior positions, it will also be possible to fill management roles from the inside. Recruiting from inside your company will always be cheaper than recruiting from outside, at least as far as key positions are concerned. The employees concerned will already have an in-depth knowledge of your company and the products or services it provides; all you will need to do is to make sure they receive the training they need to assume greater responsibility and to lead by example.
- Energy Efficiency – In the event that larger premises are required, there will be an inevitable increase in the running costs for the buildings your employees occupy. However, if these new premises are equipped with energy efficient technology such as automated lighting systems, the increased cost can be defrayed to a certain extent. Lower utility bills, along with an increase in revenue, may allow you to reduce the running costs per unit of production at the same time as ramping up overall output in a manufacturing environment. For companies in service industries such as financial consultancy, commission from new clients, together with lower energy costs, will have a similar effect.
Putting It All Together
In order to take advantage of all the points above, it will be necessary to makes plans well in advance of any expected increase in turnover. It is normally when a company finds itself desperate for outside help or more employees that good intentions go out the window and costly decisions are made on the spur of the moment. By planning ahead and examining a variety of possible scenarios that might unfold, your company can avoid putting itself in such a position and make full use of the above suggestions.
Obvious tasks that should be carried out in advance of an expected increase in turnover include the interviewing of potential outsourcing partners, the devising of training