Cost reduction is the strongest weapon in your business’ fight against inflation
Any business owner knows that this decade has been rough. From shutdowns and restrictions, to inflation and staffing shortages, and the looming threat of recession around every corner, it’s understandable that many business owners and managers are scrambling to keep their operations afloat.
I see this in my personal life as well as my professional one. A gym I belong to has been reducing its services and cutting staff as a result of pandemic hang-over and other macroeconomic challenges. While this obviously changes the gym experience, even more, it makes me think of the consequences of these actions, compared to the alternatives not taken.
In particular, this comes to mind when I see businesses compromising their services and staffing, compared to practicing more proactive cost reduction.
The dangers of losing staff.
While we are experiencing record staffing shortages in North America, and that’s not always something your business can prevent. Widespread layoffs should not be your first cost-cutting measure. Especially if your business, like many others, is already in the position of having to raise prices due to inflation.
Cutting staff and working below your optimal staffing level can have significant negative impacts on your business. These include:
- Higher likelihood of paying overtime
- Employee burnout
- Increased mistakes and accidents
- Decreased quality of service and productivity
- Lower team morale
- Higher turnover rates
You might think cutting staff is saving money, but it’s likely to cost more in the long run.
Why understaff when you might already be overpaying?
Thinking back to my gym, cutting staff and reducing services – all the while risking its customer retention –I wonder if they’ve taken a look at other expenses, instead.
My business, Schooley Mitchell, helps businesses and other organizations reduce operational expenses across thirteen categories, including telecommunications, merchant services, fuel, waste disposal, and shipping. We do this all by leveraging proprietary software, best-in-class pricing databases and long-standing relationships with service providers to find savings, and monitoring accounts on an ongoing basis so they remain optimized. All this to say, we implement savings without disrupting or reducing services.
If we look at waste expenses alone, Schooley Mitchell helps save recreational businesses, including gyms, an average of 40% on their waste disposal fees. Think about your yearly waste disposal spend and cut that by 40% – that could go a long way in preventing you from being understaffed or having to cut quality.
It’s not just gyms…
No matter what the industry, businesses should be looking to proactive cost reduction solutions before cutting staff and services.
For example, we recently helped implement payment processing savings of $47,500 per quarter for a maintenance business. Depending on your business, those kinds of savings could more than cover an employee’s wages, with money left over to improve services instead of reducing them.
The truth is that many businesses don’t know whether or not they’re paying competitive rates on their essential services. Given our experience – over twenty years and 27,000 clients to date – we have the knowledge, resources, and clout with vendors to ensure you’re paying fair prices, and not a penny more.
Contact me for a risk-free, no-obligation expense audit.
Cutting staff and reducing services should be a last resort, not the first tool you reach for.
To learn more about your business can save an average of 28% on its essential services, at no cost to your business, reach out to me at [email protected].
