We’ve been getting a lot of business leaders asking us something core to our consulting practice. In service to this, I want to share a unique and effective way how to cut business expenses.
This is our proprietary method to identify and cut business expenses. Using this method, Metaspire worked with one client to reduce operating expenses in their business by 14% while increasing customer engagement!
Before I get started with the three essential ways how to cut business expenses, there is a prerequisite.
Find an objective facilitator with a strong background in strategic planning AND culture change who you feel not only understands your company vision, values and exit strategy, but also one who is also 100% committed to your success.
Most importantly, I want you to know that these three essential ways to reducing costs in the workplace might sound a little complicated and that they’ll take a long time to do.
Well, with the right company supporting you, the scope of these changes can be determined quickly. In fact, you’ll be able to positively impact your bottom line with innovative cost saving ideas within a few weeks!!
The first way to cut unnecessary expenses is to align your business strategy with your company culture.
This is typically done by creating a Strategy Model with key decision-makers and your strongest cultural influencers.
This is a simple, yet powerful, visual description of your strategy that can result in our work together.
By outlining a few key points, you can see what key opportunities in the marketplace your organization has the capabilities for, or needs the capabilities to solve.
The conversation would then lead to how we can leverage the opportunities with the capabilities of your organization and continue with the goals, plans and rules necessary to make it happen in the long run.
After that, we conduct an alignment assessment with your key influencers and best customers to see how well you are positioned to meet your future goals and plans.
Now we have the information we need to understand what is most valuable and we create a future state roadmap to transform your vision into reality, including some business cost reduction initiatives examples.
The second way to cut expenses in your business is to be super clear on the key hand-offs and deliverables between departments especially as it relates to your value chain.
For this, we use a Business Interaction Model.
Although there are probably thousands of handoffs between departments to deliver your product or service, as you can see from the above example, we list only the critical hand-offs.
For instance, there are typically natural conflicts that occur between sales and marketing, and from marketing to operations that result in unnecessary costs and delays to your best customer.
By identifying them, we can create clear Key Performance Indicators between departments and save money.
Based on our experience, we know that when there is clarity with the fulfillment, accuracy, timing and treatment of these hand-offs, more efficiency and effectiveness results. So, we’ll also know exactly how to reduce business operating expenses without negatively impacting your employees or your customer(s).
Once this is complete, we can create a process architecture that I won’t get too much into right now, but to let you know a process architecture is a knowledge repository that depicts your end-to-end current and optimized processes. This is super essential for you in the long-term to strategically align your business with clear ways to execute customer engagement success measures.
The third and most important way you, as a business owner, can cut business expenses is by understanding your ideal customer’s experience through a Customer Line of Visibility Model.
In this Customer Line of Sight Model, in it you will see the key touchpoints that in this case the Senior Vice President (SVP) has with their Board of Directors (BoD).
Although this is an internal client example, it is key to have Line of Visibility models depicted for your core processes (Core processes are those that if they stopped existing you wouldn’t have a business). We do this to not only increase customer engagement, we also do this to provide time for your best employees to innovate new and better ways of delivering value to your ideal customers.
Once the Customer Line of Sight models are complete for your core processes, we run current and future state simulations on how much time and money these processes are costing. With the help of Re-engineering and Six Sigma, we can design future-state processes to become more efficient and effective thereby cutting costs in your business. Since salaries are the highest line item within your operating expenses, you may be wondering, how can you cut costs without cutting full time staff.
Next we’ll talk about how to cut business expenses while keeping your best employees who are giving your ideal clients the best experience.
After these models are complete, we would then create a strong business case so that you can see exactly how to control expenses in your company and keep your best employees.
Communication change and training plans with two-way communication checkpoints along the way with your key influencers would be created.
Finally, we would revisit our strategy and our roadmap to understand what types of governance and decision structures might need to change so that we can ensure these models are profitable and sustainable.
Want to learn more about how to cut business expenses in your business?
Schedule a success call with me >> https://metaspireconsulting.com/successcall
