In this economy, businesses need to get more efficient and creative about ways to pump up their cash flow. Here are some suggestions to help you get inspired to think of new ways to improve your bottom line. The first 3 ideas were presented in Part 1. Now for some more:
4. Consider different ways to accomplish the same task
Probably the biggest “rut” we get in is that things are working just fine, so “if it ain’t broke, don’t fix it.” True, but, in this time when cost saving is paramount and products and technology are changing rapidly, re-thinking how we do things can really make a bottom-line difference. Here’s where to think “out of the box”. For example, using health insurance: your company currently purchases HMO coverage for your employees and the company pays 80%. If you are like most of us, the premiums are increasing at a staggering rate. Talk to your insurance agent about different types of plans. High-deductible plans even with an 80% employer-paid contribution are often cheaper for both employees and employers in the short and long-run with primarily the same level of service. The barriers to implementation are usually related to negative perceptions of high-deductible type plans, but an experienced insurance agent should be able to address those with your employees. This is just one example, but you get the idea.
5. Re-evaluate existing workflows
I’m always amazed at how small changes can have enormous impact. Usually these are ideas that are inexpensive (if not free) to implement and can have lasting appeal. One suggestion is to challenge your employees to come up with ideas to improve workflows, processes, products, etc. Make it a contest with a prize publicly awarded and you may find you get lots of really useable ideas. Employee morale is a big factor and can be greatly increased when employees see their ideas making a difference. One idea I’ve worked with in the past is to use a cloud-based software (small monthly cost, for a multitude of users that were geographically scattered) to improve our ordering, purchase order authorization, receiving and invoicing process. This works well in a decentralized environment where small teams are responsible for their own budgets. Basically, an individual entered a Purchase Order, which was then automatically routed electronically to the manager(s) for approval. Once approved, the individual was authorized to place the order. When the item was received, the individual processed a receiving report in the system. All the data interfaced with the accounting software and was matched with a vendor invoice delivered directly to Accounts Payable.
6. Use your financial data
Here’s where you use the financial statements to real advantage. Look at cost trends over time and evaluate those expense items that are high cost or increasing quickly in cost. Consider ways to use another approach:
- Reconsider your approach – say, advertising is a high cost, reconsider how you are using print ads versus free social media approaches
- Rebid – is it time to send out RFP’s to vendors?
- Secure pricing – consider long-term contracts for those quickly increasing costs or even ones you expect to increase, like fuel and utilities costs.
These are of course only a few suggestions to what might work for some businesses. Each situation is unique, but hopefully this has inspired you to look at your business from a new angle to make the changes that will work in your environment and add to your bottom-line. Happy hunting and look for more ideas coming soon…