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8 Methods To Reduce Costs During Slow Season
- Trever Fischer
All businesses have a slow season. It’s within this period that companies have a tendency to place urgency on reducing costs. In most cases, it’s a good way to tackle costs by trimming the fat.
Unfortunately for some organizations the presumption is that managers will take the right actions to control their department costs. Or perhaps follow their CFO’s suggestions to delay critical investments, shift costs from one accounting category to another, or reduce overhead. If any of these options are being suggested, they may not be the best strategy if you’re looking for a long-term solution. They are short-term solutions that will create an illusion of cost reduction, and in turn, may cause more damage to your company further down the line.
Without broadcasting reduction costs, it is important to outline how much the company should save during its off-season. From there you can begin defining the steps on how you plan to achieve those goals.
To create value through cost cutting, managers need to understand the best ways to allocate operating expenses. This can be defined into two categories:
- Selling costs
You can influence the understanding of this directly with your managers by expressing the importance of how the return on invested capital (ROIC) and the growth of the markets in which your company plays, matter. Together, you can map out your costs. This will no doubt reveal opportunities for cost reductions as well as growth opportunities for your business.
Below 8 Methods To Reduce Costs During Slow Season:
- Enforce a no-travel policy – instead use video conferencing tools
- Place recruiting on hold – plan out a budget for the following term for when demand is higher
- Adjust hours or eliminate overtime as an option for your hourly employees
- Cut back on office supply usage and orders – utilize the cloud and reference your items digitally
- Adjust product orders – price out vendors for better production rates
- Consider repackaging your product
- Create a bundled sales strategy
- Cross train to utilize your current support and training teams