Welcome to this week’s edition of Let’s Talk, where we delve into the business world and explore cost-saving strategies.
In today’s fast-paced and competitive business environment, finding ways to save costs is crucial for sustainable growth and profitability. In this edition, our experts will shed light on various areas within a business where cost-saving opportunities can be identified and implemented effectively.
Running a successful business entails more than just increasing revenues; it requires a keen focus on managing expenses. By optimizing expenditure, businesses can allocate resources more efficiently, invest in growth initiatives, and navigate economic uncertainties with greater resilience.
Throughout this discussion, we will explore some key areas where businesses can identify cost-saving opportunities and make informed decisions to enhance their financial stability.
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Fabian Calle, Managing Director, Small and Medium Business, SAP Concur ANZ
“Small- to medium-sized businesses (SMBs) know the importance of finding ways to reduce costs and stay ahead of the competition. Every expenditure is a chance to (re)invest in their business; however, it also comes with potential risks.
“By implementing intelligent controls, SMBs can prevent overspending and minimise the risk of errors and fraud. Using technology that automates financial processes and operations increases transparency and provides near-real-time visibility into spending.
“To find opportunities to cut costs, businesses need better visibility into their spending. Unfortunately, internal fraud, such as expense reimbursement, and external scams can lead to significant financial losses. By consolidating data from multiple sources into a single platform, SMBs can monitor spending no matter where or when it happens. This approach leads to better spend visibility, budget control, and cash flow optimisation, resulting in smarter spending decisions that boost profitability.
“Investing in financial automation technology is a strategic move that can help ensure long-term profitability and competitiveness. By automating financial management processes, businesses can focus on their core competencies while reducing the costs and risks associated with managing their finances.”
Greg Newham, APAC Associate Director, Verizon Connect
“As inflation drives up operating costs, Australian and New Zealand businesses are looking at ways to improve productivity and efficiency – one of the ways is by applying fleet technologies for those businesses who rely on vehicle fleets.
“Small businesses have the potential to save tens of thousands of dollars by adopting technologies like integrated video and telematics to better manage their fleets.
“According to Verizon Connect, which surveyed more than 300 fleet managers, executives and other mobile-business professionals, implementing in-cab video technologies reduced accident costs by 57 per cent and insurance costs by 44 per cent. Technologies such as telematics help fleet managers generate better efficiencies and drive down operating costs by offering greater insight into usage and route patterns.
“Australian businesses are also exploring technologies to track non-public road use to maximise fuel tax rebates more accurately and avoid potential underclaims or overclaims that result from data inaccuracies.
“Technologies such as data tracking and analytics can also provide better insights into driver behaviour, purchasing options and assist with planned maintenance schedules. Using data tracking, fleet managers can also actively monitor speed, idling and routing that can help optimise fuel use and reduce unnecessary waste.”
Dr Jana Matthews, ANZ Chair in Business Growth and Growth Expert of the Australian Centre for Business Growth
“There are times in the life of every company when there’s not enough money in the bank to pay the bills, and the owner has a panic attack.
“It’s time to determine whether you have a cash flow or a deficit problem.
“If you don’t have enough cash in the bank to pay your bills, that could be because you aren’t invoicing your customers promptly – or because they are slow paying. If the former, get those invoices out by tomorrow and teach your Accounts Receivable (AR) team to invoice promptly. If the latter, get someone from the AR team to phone late customers and ask for payment, NOW.
“On the other hand, if your expenses are growing faster than your projected revenue, then you have a deficit problem and should take immediate steps to reduce expenses, e.g., require two signatures for expenditures such as travel, equipment, new contracts, new rental space, new hires – and investigate what’s causing the expense blow-out.
“Cost cutting isn’t the only option. Generating more revenue by raising the price of your product/service or incentivising your sales team to sell more products/services are options that can prevent those panic attacks!”
Anthony Spiteri, Regional CTO APJ, Veeam
“To identify cost-saving opportunities, businesses need to undertake a comprehensive analysis of current expenses on technology products and solutions systems.
“The backbone of every organisation’s IT and business operations is its digital infrastructure, and this is also at the heart of innovative transformation efforts. But the key to realising the full potential of such solutions is by strategically investing in select ones – for example, cybersecurity and data protection measures.
“These are priorities because data is critical to keeping businesses running, and businesses simply cannot afford any extended downtime, especially in today’s market conditions. Reliable ransomware protection and recovery ensures the resilience of your digital infrastructure is guaranteed.
“Businesses need to invest in technologies, streamlining operations and choosing vendors that offer flexible solutions.
“It is only then that significant cost savings are realised, along with enhanced resilience and a better repositioning for growth.”
Chris Green, Mentor, Strategist, Key Note Speaker, and Author of Business By Design
“The costs of doing business continues to rise. There are things you can’t control but there are also often-hidden gems that can help you balance the books. As a starting point, examine the overall business objectives you are looking to achieve. Can you deliver the same customer utility but in a more creative, cost-effective way? Drafting a budget from scratch and questioning everything against this framework is a great way to identify potential savings.
“Next, examine your ongoing subscriptions. Do they serve the now evolving business model? Are there new applications that are more efficient and cost effective? Finally, review staff numbers and efficiencies. Are there overlapping job roles that historically made sense but no longer serve the business. Do the current roles and responsibilities reflect consumer demand? What are the opportunities to improve productivity? Reimagining your business through the lens of customer utility can often yield surprising financial results.”
Will Buckley, Country Manager Australia, Xero
“We know cash flow is a significant stressor for businesses. Without having clear visibility into the financial position of your business, it’s very difficult to know where you can make cost-saving measures. Here are three actions business owners can take:
- Monitor cash flow closely: It’s critical you understand the numbers behind your business. Using technology like cloud accounting software can provide real-time insight into your cash flow and expenses so you have full clarity of where money is flowing.
- Work with an advisor: An advisor such as an accountant or bookkeeper is a valuable asset to your business, and providing advice on where you can make cost-saving measures is just one of the many areas they can support you. With EOFY approaching, an advisor can make sure your business is being taxed the requisite amount, and also ensure you are getting eligible tax breaks.
- Streamline customer payments: Making it easier for customers to pay you can help reduce cash flow challenges in the first place. Using digital payment systems like Stripe for example, can give your customers more flexibility and ways to pay. You’ll also have better visibility over transactions, so you can spend less time monitoring or chasing payments.”
Les Williamson, Managing Director ANZ at Check Point
“As a seemingly continuous wave of harsh cyberattacks hit Australia’s biggest brands and institutions, boards and business leaders are realising that cybersecurity risk prevention strategies need to be in place across their own business and their external value chain.
“Whilst government regulators are relooking at improved legislation and hack the hacker initiatives, organisations are looking to build out strong cybersecurity prevention and defence capabilities whilst reducing their overall operational cost lines and grow revenue.
“One specific cost reduction Cyber security strategy that business can deploy is through consolidation of their Security partners and vendors, implementing a comprehensive suite of solutions and services to drive their risk prevention strategy.
“Consolidated security can offer increased levels of prevention and risk mitigation across all aspects of the enterprise, its people and its value chain, leading to cost savings and operational efficiencies. By omitting the challenge of dealing with a variety of disparate third-parties and bespoke tools that do not work well together, a business can find operational synergies and higher staff productivity and the highest levels of preventive cyber security.
“Cost savings whilst maintaining a prevention first cyber security enterprise-wide strategy is possible to achieve by businesses adopting the Check Point consolidated security framework and comprehensive set of solutions and services.”
Elise Balsillie, Head of Thryv Australia
“What a lot of business owners don’t realise, at least at the start of their journey, is how valuable their time is. Freeing up time means you have the ability to pursue strategic business goals, bigger contracts or even expand your business locations. This means your time literally is your money!
“A great way to save money and identify savings is to hire an office manager. But there’s no better office manager than one you don’t need to train – and that’s where technology comes in.
“Having a virtual office manager – also known as a Customer Relationship Management (CRM) tool, will alleviate you from ongoing tasks and streamline your business. A CRM can also help you identify where further cost savings can come in – whether that is managing staff scheduling more efficiently, taking online bookings to free up phone lines and more.
“The right CRM can facilitate easier communication with your customers, boost collaboration amount staff and internal communication, scale your business easier and integrate to meet your changing needs. Finally, a CRM can support with better data-based decision-making which can help you take your business to the next level.”
Jarrod Kinchington, VP and Managing Director ANZ, Infor
“The focus on reducing costs, and improving profitability is not a new initiative. Leveraging the benefits offered by emerging technologies, such as artificial intelligence (AI), is a proven approach to achieve desired outcomes. As applications continue to expand and the technology matures, AI provides valuable insights into operational efficiencies and helps to reduce costs, while maintaining and improving quality and customer satisfaction. According to research conducted by McKinsey, tech-enabled cost-reduction approaches using AI have been shown to reduce indirect costs by up to 20 per cent in 12-18 months.
“As important as it is to identify the areas where savings can be made, it’s also vital to improve financial resilience across your organisation’s ecosystem. From predictive maintenance to supply chain optimisation and fraud detection, businesses that leverage AI technology are reducing bottom line costs, while also implementing innovative solutions and data-driven decisions that future-proof business revenue and offer a competitive edge. The potential benefits make it a worthwhile investment for businesses looking to navigate difficult economic periods and emerge stronger.”
Ed Knott, Vice President, Asia-Pacific, DocuSign
“One starting point is assessing which manual tasks across your business could be eliminated by simply going digital. Transitioning to a paperless business not only saves money (paper, supplies, printing, postage and manual labour costs) but also reduces the time it takes to execute new contracts, thereby making your business more productive. It also gives time back to employees to do more impactful work. Going paperless saves at least USD$36 per document signed digitally. Multiply this by thousands of documents executed per year and the gains can be huge.
“Another area to evaluate is your end-to-end processes and whether your existing SaaS applications are being fully utilised via smart integration. For example, when you’re generating contracts, if you integrate this capability directly with your core systems like Salesforce, SAP, Microsoft or Workday, you will reduce friction, manual errors, and save your business time and money.
“Given the current macroeconomic challenges, assessing the efficiency of internal processes is an effective way to maximise savings and increase ROI.”
Richard Gerdis, Vice President and General Manager, APJ, LogicMonitor
“The acceleration of digital transformation projects in recent years has led to a significant increase in investment of technology infrastructure and tools by businesses. While this has been beneficial in many ways, it has also resulted in a huge influx of data volumes and increased complexity for IT teams. Here are two ways businesses can tackle these challenges and reduce expenses.
“The first is to maintain real-time visibility into the performance and health of IT systems to evaluate where businesses can cut costs. By having the ability to monitor key metrics, logs and events, IT teams can quickly identify and resolve issues before they escalate into expensive outages. This not only minimises costly downtime and productivity loss, but also enables businesses to optimise their IT infrastructure.
“The second is to leverage the data insights surfaced to gain insight into resource utilisation and performance bottlenecks. By evaluating the productivity of the tool stack, businesses are able to identify underutilised resources and reduce unnecessary costs associated with overprovisioning.
“Ultimately, maintaining a robust and reliable IT environment requires budget efficiency, proactively identifying issues and streamlining processes to gain a competitive edge.”
Merlin Luck, Regional Vice President, Salesforce
“In today’s fiercely competitive landscape and with ongoing economic uncertainty, every business is looking to do more with less.
“To identify and act on cost savings, businesses must consolidate and reduce complexity by automating workflows across their technology stack. Leveraging CRM technology such as Salesforce Customer 360 can simplify and bring together workflows across the business, all while improving the customer experience. This means an entire organisation can safely work on one platform in real time, creating a consolidated experience for both the customer and your people.
“When considering their CRM, businesses should also look at those powered by artificial intelligence. For example, Customer 360 is powered by Einstein AI. Einstein provides businesses with data-driven insights, product or resource recommendations, and next best actions. This aids decision-making and helps businesses work faster and more accurately.
“By consolidating all operations onto one CRM system, fragrance brand who is elijah was able to deliver $240,000 in cost savings annually, reducing the time to complete tasks and expenses associated with inventory and wholesale management, with AI-driven solutions helping the business sell smarter and more efficiently.”
Damien Sheehan, Country Head of Australia, IWG
“In the current economic climate, companies are seeking new ways to save costs and operate more efficiently to future proof their businesses. One solution that has grown in popularity and demand is hybrid working, where employees divide time between locations – a local office or co-working space, a corporate HQ and home.
“Hybrid is here to stay, and despite the threat of recession, we’re likely to see many more businesses reaping the benefits of this way of working, particularly as it is highly popular with employees providing an improved work-life balance.
“Research shows that the adoption of hybrid work, and utilisation of flexible office space can significantly reduce a business’s bottom line with companies shifting from large city centre HQ offices with long and expensive leases to flexspace which can be scaled up and down as needed. Companies that embrace hybrid work are now saving on traditionally fixed overhead costs including rent, heating, and support staff, adding up to an average of $14,300 per employee.
“With the increase in cost of living, adopting a hybrid working model is also a win for employees just as much as the business they work for. By ditching long, expensive daily commutes into city centres, employees can save time and money and spend more time with friends and family, close to where they actually live.”
Mark Innes, Senior Vice President, APJ at Coupa
“Businesses can identify cost savings by containing costs smartly rather than cutting broadly. Leaders of resilient companies tend to differentiate value from waste, position investments for growth, maintain their commitments to ESG policies, and explore actions that don’t require them to cut headcount. Effective cost containment starts with investment in Business Spend Management (BSM), software that provides a holistic view of spending to make quick, but impactful, data-driven and business-critical decisions. It also improves spend and cash visibility, optimises risk and sustainability, and increases agility to invest at the right time. Cost savings isn’t just about cutting spend, but ensuring every dollar is spent effectively.
“BSM offers businesses multiple levers for cost containment, such as: streamlining financial approval processes, digitising supplier adoption, understanding options to defer spending and retain cash, improving travel and expense policies, realising savings fast with strategic sourcing, and reducing risk while retaining ESG commitments. It also enables companies to save by leveraging the collective insights and buying power of trillions of dollars in spend. A combination of adopting best practices and leveraging the right platform will enable businesses to fortify balance sheets immediately and set themselves up for success, financial stability and certainty whether we’re in bull markets or bear markets.”
Chris Holmes, Co-CEO and Vice President of Spend Management at Portt
“In other words, how can businesses create opportunities for value creation and achieve cost savings? For companies that want to keep a tighter rein on their business spending in this challenging economy, one easy solution to creating value and identifying cost savings is to digitise their procurement and supplier management process.
“By managing procurement and supplier relationships through a digital platform, businesses can see what spend is under-management, ensuring they can control it, and begin working with suppliers to reduce maverick spending. The alignment of procurement, the buyer and the supplier through technology leads to an environment of collaboration, which results in cost savings and value creation.
“Embarking on a procurement digitisation journey is essential in helping businesses have visibility of organisational spend. Tighter collaboration with buyers and suppliers will help identify leakages and control spend to reduce costs to the business. It also enables procurement to play a more strategic role in accelerating business innovation and maturity, creating bandwidth to take organisations to new levels of value creation and market competitiveness.
“Portt provides organisations with effective tools to positively impact their environment, people, and business value through effective spend and supplier management solutions.”
Billy Loizou, Area Vice President, Amperity
“As the economy inches closer towards a recession, many companies are looking to cut costs. However, a better option is to bolster their first-party data foundation. Bringing together siloed and fragmented customer data allows brands and businesses to connect the dots on who their customers actually are – a huge win for the bottom line.
“Research demonstrates the cost of not knowing your customers is high, reaching upwards of AU$16 billion in some cases. So for the marketers who are still relying on third-party data, consider this your wake-up call. The looming deprecation of third-party cookies is set to impact your ability to optimise media buys, reach lookalike audiences, measure ad effectiveness and personalise experiences for customers.
“Bottom line, you can’t deliver personalised experiences to customers if you don’t know who they are. This is why identity (ID) resolution is so important — it turns scattered data into concrete customer information. Customer metrics drive business metrics. To thrive, businesses must rely on their first-party data to power their strategies. This will help ensure they hold onto customers and remain a step ahead of their ever-evolving purchasing habits, regardless of economic conditions.”
Justin Dery, CEO, Doddle
“One major cost for businesses selling online comes in the form of returns. Generous returns policies drive loyalty, but returns often cost 2/3rds of the item price to process. With around 1 in 5 ecommerce purchases being returned, controlling returns costs is essential for ecommerce success.
“To achieve returns cost reductions, retailers need visibility and control over the returns journey. Simply shipping items with a pre-paid returns label is easy for customers, but gives the retailer limited visibility of which items are coming back, when they’re being sent, and why.
“Using a digital returns journey means retailers can connect order data to the returns process. They can prevent returns of ineligible items, and leverage returns fees depending on the reason for return – for example, where items are damaged, they can offer a free return, but for “buyer’s remorse” returns, a small fee helps recover some of the cost.”
Hoa Lam, Regional Vice President, Australia and New Zealand, Kofax
“The current economic uncertainty has created extremely challenging conditions for organizations looking to improve their bottom line. While it is tempting to take on an austere mindset, the trick to reining in operational costs lies in equipping the business to navigate the current headwinds.
“For example, a report by Deloitte found that intelligent automation has helped organizations streamline core processes and improve productivity significantly. Crucially, the survey found that this enabled businesses to unlock between 25% and 40% in savings.
“One of the ways this is manifested is through the marked reduction in human error. Leveraging AI-powered intelligent automation can remove reliance on human interactions in complex processes.
“Furthermore, it can create better quality, more actionable data. Not only does this drive business outcomes, but it also enables organisations to better navigate tricky regulatory terrain.
“High operational costs are certainly a threat to business viability, but with intelligent automation, organisations can reduce waste. By freeing employees from repetitive tasks, organisations enable them to unleash their full potential and realize high-value projects.”
Karen Kirton, Founder, Amplify HR
“It can be ‘easy’ to cut the training budget or enact redundancies, but these are often short-term cost saving activities with long term consequences.
“For a more sustainable approach, actively seek input from your employees about cost savings – and be specific. Ask for examples of where they have noticed inefficient processes, red tape or opportunities for revenue. Explore those ideas, select the ‘quick wins’ and then empower employees to take action to increase efficiencies. This can not only reduce costs but also increase engagement and motivation, thereby increasing productivity.
“This is also the time to focus on employee retention, as hiring and onboarding new staff is expensive in direct (e.g. job ads, agency fees) and indirect (e.g. manager time to interview, lost productivity) costs. Undertake a staff engagement and satisfaction survey to understand your culture baseline and commit to taking actions to improve. As you build and cultivate your workplace culture, productivity and retention will increase, reducing business costs.”
Nathan McNally, Account Management Lead at Airwallex
“Cutting costs is a quick way to increase your profits and optimise operations. However, it’s important to only eliminate costs that won’t negatively impact performance; identifying what your business can go without can be difficult. Here are some approaches to help you make the right decisions on what or where to cut spending:
- Identify unnecessary expenses – Evaluate your business expenses and get rid of under utilised company assets, such as dormant subscriptions.
- Check you’re paying the best financial rates – Many businesses bank with the same provider who set the business up initially, often one of the big four. But across a number of processing payments, such as foreign exchange, the big banks are not always the most competitive. Investing in a new banking partner can help generate payment savings for the same service, as was the experience for luggage retailer July.
- Optimise internal team expenses – Utilise a one stop shop corporate card that enables internal teams to better keep track of employee expenses, gain better oversight and simplify hours of reconciliation.”
Henry Lee, CEO, Napoleon Perdis Cosmetics
- “Itemise your outgoings, even the minor expenses and strip expenditure back to essential services; the core suppliers, goods, infrastructure or services that your business really can’t operate without. Calculate your Cost of Goods Sold (COGS) and Cost of Doing Business (CODB) to understand your margins and overall business health.
- Benchmark key metrics such as inventory, sales, marketing, finance and human resources. This will provide you with initial clues as to which areas make sense to prioritise for targeted cost reduction. Industry trade bodies can generally help with understanding averages within your category.
- Target the big-ticket items first – in retail businesses that’s usually inventory, wages and rent. Across these variables, even a small percentage saving can represent a significant dollar amount.
- Avoid non-essential spending – if you’re playing defence, it’s likely not the time for a flagship store refurbishment, new packaging, or a new brand ambassador.
- Think laterally. Cost savings are not only about negotiating better prices but can also be found in process improvements across a range of operational and logistical areas. For example, with Napoleon, we consolidated disparate ERP systems, resulting in efficiencies that reduced labour.
- Stay across new technology. With the correct prompting, a range of new AI ultra bots, such as chatGPT, can draft copy, write code, calculate accounts and much more. For SMEs, the investment in software licences and AI tools could result in significant cost savings in contrast to using agencies or freelancers for the same tasks.”
Marcus Paterson, Sales Director, APAC, Storyblok
“Many organisations continue to use traditional CMSs and/or custom-built monolithic environments for their content management needs. While they have been the ‘go-to’ for years and may have served their purpose in the past, they often require a lot of maintenance and can hinder productivity.
“However, the right technology can be a powerful tool for saving money and time. Modern headless CMS solutions like Storyblok offer organisations greater flexibility, scalability and agility, allowing them to adapt to changing market needs, improve customer experiences and boost productivity. The efficiency gains can be staggering, in fact, Storyblok’s ROI Calculator helps businesses identify areas where cost savings can be made.
“In fact, a recent Forrester report reveals that developers and marketing teams investing in creating better content experiences with CMS Storyblok are seeing a 582% ROI over a three- year period with the project paying for itself in less than six months.
“Even more, the commissioned Total Economic Impact™ study conducted by Forrester Consulting on behalf of Storyblok, also revealed typical customers saw:
- AU$2.38m benefit gained due to single source management of content
- 3x productivity boost through gained efficiencies due to deployment setup
- Better customer experience through scalable content operations
“In today’s environment, businesses can't afford not to invest in the right tools to help them cut costs while delivering exceptional customer experiences.”
Jose Barroso, General Manager ANZ, Zai
“Identifying cost savings can be tricky, but a good place to start is looking at services that you use every day in order to do business and working backwards to streamline operations.
“Payments is one service that is easily addressed. Many small businesses set and forget their payment solutions, and may not realise the consistent innovations in the technology underpinning them.
“For example, PayTo is a new payment service that already has 75% coverage of NPP addressable bank accounts expected to reach over 90% in the coming months. It’s a fantastic solution that allows businesses to initiate real-time payments from their customers’ bank accounts, charging them a recurring fee with a direct bank transfer. There are new innovations like PayTo coming out all the time that have the potential to reduce transaction fees, safeguard payment initiation through multi factor authentication, and offer easier ways for your customer to pay.
“Additionally, businesses who accept different forms of payments and are integrating solutions separately may be causing themselves unnecessary complexity as they grow. Reviewing these integrations and researching solutions like APIs, which allow businesses to accept several payment options with a single integration, can remove this complexity of multiple payment providers and reconciliation and ultimately save money.”
David Britten, Managing Director APAC, Corpay
“Small and medium-sized enterprises (SMEs) in the global marketplace may need ways to stay ahead of the competition and boost profitability. Unfortunately, hidden costs and fees associated with cross-border transactions are often overlooked, which could significantly impact an organisation’s bottom line.
“According to a recent study, the average premium charge for sending payments across borders is 3.39 per cent1, with banks also charging significant administrative fees on each transaction. To avoid these excessive processing fees, SMEs could turn to a cross-border payment specialist that offers a range of tools, including foreign exchange (FX) structured products, forward contracts, currency options, and over-the-counter derivatives.
“By partnering with a specialist in cross-border payments, businesses could leverage tools to simplify how they connect with the global marketplace, help protect against unpredictable currency fluctuations, and potentially improve their financial performance. With the right partner, SMEs could navigate the complex world of global payments with confidence and ease.”
Laura Hill, Australian Managing Director, Sendle
“There is no denying that Australian small businesses are feeling the pinch with record inflation and the cost of living only increasing. Knowing exactly where to cut costs and make savings has never been more important for small business owners. If you’re an ecommerce business when it comes to choosing suppliers such as shipping partners or various tech tools, shopping around to ensure you’re getting the best deal is something that should be considered.
“One of our customers, for example, Andres Herrero of Sydney Sock Project managed to save around $8,000 on his shipping costs after deciding to shop around and compare what other carriers were offering. He realised we had a very cheap 250 gram parcel that was the perfect shipping solution for his socks brand. If he didn’t do the extra research he may have never discovered this great cost saving.
“While it may take a little more time to re-evaluate suppliers, negotiating or reassessing means knowing you got the best deal for your business, and that’s priceless. Shopping around also opens the door to any potential sales that might be running or perhaps lead you to discover a new tech integration as an added bonus.”
Terri Martin, CEO and Founder, The Business Bunch
“The first area I advise clients to look at when trying to save money are their supplier costs. Businesses get complacent when using suppliers but it’s integral to review supplier costs at least once a year to ensure you can save money. Here’s some ways you can do this:
- Ask your suppliers if they can review their costs to help provide you with cost savings – if you don’t ask, you won’t get
- Get competitive quotes, and let your supplier know you’re doing this so they have a chance to review their costs as well
- Review how much you pay over a year with each supplier
- If you’re on retainer, ask them for monthly reconciliations to ensure you’re using the full amount
- if you’re paying project by project, investigate what you could save by moving to retainer
- If you use long term contractors, look at what could be saved by moving to permanent staff
“This type of investigative work can take time and is great to outsource to a third party who will take the emotion out of any relationships you may have with suppliers and seek only to find costs savings instead.”
Walter Scremin, CEO, Ontime Delivery Solutions
“Some cost savings areas aren’t immediately obvious. Consider a major business expense for many companies which rely on shipping goods – delivery transport, which is a great source of ‘hidden costs’.
“Unless these hidden costs are brought out into the open and understood, it’s difficult to make genuine cost savings in this area.
“Hidden costs in delivery transport include things like under-utilised vehicles, issues with driver reliability and absenteeism, inefficient route planning, poor driving leading to higher maintenance costs, unexpected repairs or accidents, or misallocating resources.
“Each of these may not look like much in isolation, but they soon add up to a lot. Exposing these costs via an audit or ‘fleet x-ray’, and then acting on them, will often lead to cost savings of 10-20 per cent.
“Business can then apply a similar discipline to other costly areas of their operation.”
Carl Warwick, Regional Sales Director, APJ, BillingPlatform
“Small business owners know the formula to become more profitable: first, increase revenue and second, reduce expenses. There are a number of ways to reduce costs, including taking a thorough look at all monthly recurring expenses, annual contracts, one-time charges and payouts to vendors, employees and management.
“What often gets overlooked is the inherent cost savings in automating routine business processes. While there is usually an initial cost to get started, many companies are finding the long-term cost savings far outweighs the initial investment as well as the yearly maintenance or other fees associated with using the automation solution.
“For example, automating the time-consuming and labour-intensive processes around billing and invoicing can reduce labour cost by 50 per cent or more, freeing up employees to spend more time on analysis and strategic imperatives that provide a higher degree of return for the business.
“Business owners need to take a long-term view of cost savings and identify those investments that will have not only expense benefits but also make improvements in customer experience and build competitive advantage.”
Steven Nicholson, Co-Founder and CEO, Retinue Accounting
“In times like these, when inflation pressures are impacting all businesses, we focus on these areas with our clients to help them identify potential cost savings:
- When purchasing anything new, always ask for the best price – you will be surprised how often small discounts are available if you ask.
- Look at your legal and accounting costs. Don’t accept billing by the hour. Ask for fixed fees and annual service retainers.
- Don’t let services contracts auto-renew without contacting the supplier and asking for a loyalty discount to renew. Also, get competitors to quote for your business.
- You may be able to merge purchases from several suppliers to buying all from one to unlock discounts from bigger spend and save on multiple delivery fees.
- If your cash flow allows it, does it make sense to buy in bulk and store inventory to take advantage of bulk discounts?
- Signing longer term agreements with service providers should always come with a pricing discount. Don’t commit without one.
“You need up-to-date financial information from your bookkeeper or accountant to be able to identify these opportunities. If you are not getting this level of support, it may be time to look for an alternative service provider.”
Selda Kaplan, CEO and Co-Founder at TaxLeopard
“Unlocking cost-saving strategies is crucial for sole traders and small to medium-sized enterprises (SMEs) looking to bolster their financial health.
- Embrace technology and the power of cloud-based accounting software. Automate financial processes, effortlessly track expenses, and generate insightful reports. Streamlining efficiency offers you more time to focus on what truly matters: growing your business.
- Dive into the nitty-gritty of your expenses to uncover areas primed for optimisation. Negotiate contracts, seek better deals without sacrificing quality. Scrutinise bills and explore energy-saving options to reduce costs and contribute to a greener planet.
- Stay ahead of the tax game by comprehending your obligations inside out. Partner with tax experts (or software) to leverage deductions and incentives tailored for sole traders and SMEs. Drive savings while ensuring compliance.
- Lighten your workload and trim costs by outsourcing non-core tasks to benefit from specialised support without the burden of full-time staff.
- Foster relationships with fellow small businesses and professionals in your industry. Pool resources, share marketing efforts, and collaborate on projects to unlock savings and amplify your collective impact.
“By engaging these strategies, you’ll embark on a cost-cutting journey that ignites growth and fortifies your financial foundations, to chart a prosperous path forward.”
Lachlan Grant, Co-founder and CEO of Vital Addition
“In times of financial uncertainty, every dollar counts for business success, it’s all about keeping an open and innovative mindset.
“By organising financial data into categories like operations, marketing, and administration, patterns and anomalies become clear, and efficiencies can be identified. Regular supplier reviews and negotiations is another key strategy. This could lead to cost reductions, or the discovery of alternative suppliers with better rates and terms.
“Energy efficiency should also not be overlooked. Investment in energy-efficient equipment and sustainable practices can lead to long-term utility savings.
“A company’s greatest asset is its staff. Fully utilising their skills and promoting upskilling and cross training can enhance efficiency and save on additional staffing costs.
“Lastly, technology is a game-changer. By integrating automation software, project management tools, and digital marketing strategies, processes can be streamlined, manual labour reduced, and efficiency increased. These steps collectively contribute to significant cost savings, crucial for business growth.
“Cost savings are a critical factor for business growth. Seeking expert advice from an outsourced financial expert team can offer you insights to maximise your operational efficiency and business financials.”
Craig Dangar, Senior Partner and Principal Consultant at Vault
“For businesses start at the basics, we recommend understand what you need and what you are using, practically look at your subscriptions and the regular payments.
“Understand your monthly budget and what can be rationalised, a line by line analysis will help you understand what you are spending and what you no longer need.
“It may sound silly but grab your bank statement and ask the question, are you using it, do you need it or can you do a better deal. Once you’ve done the review ring your supplier and ask the question.”
Phoebe Netto, Founder and Managing Director at Pure Public Relations
“Reducing time spent by you and your team, reduces your costs and creates more opportunities to increase your growth and profitability. There has never been a more opportune time to do this than now, with the vast number of time saving technology and tools available.
“We have created measurable efficiencies by using:
- Loom to record your screen for updates and handovers, or feedback on a document or design
- Asana for project management and collaboration – reducing emails and meetings in the process
- Chat GPT for research and synthesising information
- Rev.com and otter.ai to transcribe videos, dictated notes, and meetings
“Also, a team culture that encourages each employee to question why they are doing what they are doing, leads to innovation and improved efficiencies. Unnecessary steps can be eliminated or replaced with better processes, new tools can improve outcomes or speed up a task, and improvements in ways of working can be identified.
“This, combined with having everyone focus their work on their strengths, leads to new and even creative ways of working and improved performance. None of these practices will create immediate cost savings, but over time they will.”
Aimee Baker, CEO, Ari Recruitment and Ari Media
“We all know that finding ways to trim expenses is vital for business success, so doing a deep dive and having a strategy is important.
“First, take a good look at your finances. It’s time to identify the costs that can be reduced or eliminated without sacrificing quality. Are you overspending on subscriptions, utilities, or office supplies? Remember, your suppliers are your partners. Don’t hesitate to negotiate pricing or seek out more competitive bids. Building strong relationships and finding win-win solutions can make a real difference.
“Next, embrace the power of technology. Automating tasks and streamlining processes can work wonders for your bottom line. Plus, it frees up valuable time for you and your team to focus on what truly matters.
“Now, let’s get creative! How about exploring outsourcing? It can cut down your operational expenses but also open up new avenues for productivity and work-life balance.
“Lastly, don’t forget your incredible team. Invest in their training and development, to empower them to work efficiently and minimise costly errors.
“By implementing these cost-cutting strategies you’ll be well on your way to a leaner and more successful business. Let’s conquer those financial challenges and thrive!”
Karen Platt, Co-Founder at CandleXchange
“When it comes to saving costs in business, retailers often overlook several areas. At CandleXchange, we’re at the forefront of the ‘reuse’ movement. Not only does reusing items cut costs, but it also prevents volumes of single use materials from ending up in landfill.
“Quick fixes like reusing packaging and filler make a big difference. And why not also offer customers packaging that can be repurposed? Imagine wrapping that doubles as a tea towel or a reusable tote bag. Retailers can also save on marketing collateral by creating a QR code that leads to their digital brand assets online. So often online purchases are stuffed with additional marketing collateral – freebies and print outs – which are rarely utilised.
“In the office, there are hacks too. Make a commitment to go paperless, or seek out preloved office furniture online instead of buying new. To tackle sky-high rental costs, consider sharing your premises with another small business, which can also help save on utility bills. CandleXchange, for example, shares a retail space with a florist—a mutually beneficial partnership that enhances the gifting experience!”
Anurag Vasisth, group CEO, Loyalty Now
“The current economic landscape poses challenges for businesses and consumers alike, with increasing interest and inflation rates, supply chain shortages, and rising costs of goods and services. As a result, businesses must find ways to reduce expenses while maintaining profitability and customer satisfaction.
“This is where digital loyalty and rewards programs come in, providing a solution that reduces costs for both businesses and customers while increasing profitability and value. By facilitating direct engagement with customers and reducing collateral costs, these programs promote customer loyalty and drive increased sales. Additionally, they offer direct cost savings to consumers at the point of sale, further enhancing the customer experience. By incorporating these programs, businesses can effectively navigate economic challenges while strengthening their relationship with customers.”
Lewis Schenk, Founder and CEO, Boost Media Agency
“Businesses can identify areas for cost savings through strategic approaches. Firstly, analyzing expenses and budgets helps pinpoint overspending and potential savings. Streamlining the supply chain through supplier evaluation, contract negotiation, and lean practices reduces procurement costs. Embracing technological advancements, such as automation and data analytics, improves efficiency and cuts labor and infrastructure expenses. Enhancing energy efficiency through audits, upgrades, and sustainable practices lowers operational costs. Lastly, engaging the workforce and encouraging innovative ideas unleashes cost-saving initiatives. By adopting these strategies, businesses can efficiently identify and capitalize on areas where cost savings can be made, ensuring financial viability and competitiveness.”
Robert Adelman, Owner, The No BullShit Business Coach
“While some opportunities for savings may be obvious, there are often hidden areas that go unnoticed. By employing non-traditional methods, businesses can uncover these opportunities and make significant cost reductions without compromising the quality of their products or services.
“One approach to identifying cost-saving opportunities is to analyse existing processes and workflows within the organisation. Take the example of a client with over 20+ proposal templates, resulting in an ineffective and time-consuming selection process. By streamlining the templates into a single, efficient format, the client was able to reduce a 2-hour process to just 10 minutes.
“Similarly, businesses can review their expenditure in specific areas, such as IT services. Another client was able to cut their IT spending in half by engaging an expert in the field. This expert identified areas where the company was overpaying for services and proposed alternative solutions without compromising the quality of support. By seeking specialised knowledge and understanding industry benchmarks, businesses can optimise their spending and achieve significant cost savings.
“It is essential for organisations to look beyond their P&L to uncover potential areas for improvement. While financial reports provide a high-level overview of the company’s financial performance, they may not highlight specific areas where costs can be reduced.
“This is where a fresh perspective becomes invaluable. By involving someone from outside the business, can benefit from an unbiased evaluation of their operations.
“By adopting a holistic approach and actively seeking out inefficiencies, organisations can achieve significant cost savings while enhancing overall productivity and profitability.”
Avi Efrat, Owner and Founder, Fantastic Framing
“Investigate and evaluate the cost of goods and consider importing them. There’s a misconception that small businesses shouldn’t or couldn’t import their goods. But, that’s simply not true, small businesses need to think outside the box and be competitive with their prices without compromising on quality. You could save up to 40% on your stock by importing some of your goods. Even look for options for financing your imports if upfront costs are an issue.”
Dhanush Ganglani, Managing Director, Eden Exchange
“A significant advantage of expanding a business to regional areas is the potential for cost savings. Unlike many developed countries, Australia has seen an outflow of people from capital cities to the regions over the last 15 years, according to the Regional Australia Institute. This trend has been bolstered by the embrace of remote working arrangements.
“Not only can expanding to a regional area help to boost profits for franchisees by providing a well-known business to a community with fewer options, but it can also lead to cheaper properties and lower running costs.
“However, it’s crucial to approach any expansion with a proactive mindset and a willingness to adapt to new strategies. Technology is key for franchising businesses, and exploring innovative solutions like online training sessions or new revenue streams can help streamline operations and maximise efficiency.
“It’s also important to note that the focus of regional expansion should not solely be on profits. Rather, businesses should aim to work with the community to build loyalty and establish a positive reputation. This approach will create a win-win situation for both parties, ensuring long- term success.”
Natasha Rock, ITSG Lead, GoTo
“Businesses can identify areas where cost savings can be made by firstly evaluating their existing technology stack and IT investments. Over the last few years, many organisations have adopted a wide range of IT solutions to answer different needs, however, the cost to maintaining their dispersed inventory can be harmful, especially during potential economic uncertainty. GoTo’s 2023 IT Priorities Report found 82% of businesses are focused on consolidating their communication, collaboration and IT management and support solutions with the primary reason of easing IT burden.
“Instead, business leaders can look at implementing a consolidated all-in-one technology solution that addresses all essential IT needs. Solutions that implement features such as remote support, multi-factor authentication, User Account Control (UAC), unattended access, mobile support, and scripting on one singular platform will greatly help in saving costs on licensing and additional running costs, while still contributing to business success.
“For example, Fujifilm, who uses Rescue built by GoTo stated “Today 69% of FUJIFILM Asia Pacific customer support transactions are resolved via its eSupport remote strategy, that’s over 2 million transactions per year. Remote access through Rescue has been a major enabler in achieving these results whilst also significantly reducing field onsite costs and man hours associated with sending field teams to troubleshoot minor issues.”
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