Business

7 Popular Cost Reduction Strategies for Business — Ranked

It’s time to jump into the most popular cost reduction methods so your business thrives. Still on the fence? Then check out these examples

Published

3 years ago

January 23, 2021

Erica Jones

7 Popular Cost Reduction Strategies for Business — Ranked

One-third of small businesses survive 10 years which shows you must strike the perfect balance between profiting and budgeting.

Businesses should also track their costs so they know which areas to scale back on. Perhaps you’ve heard the term “cost reduction strategy” but you’re not sure what it does and if it’s relevant to your business.

Sounds like you? Luckily, you’ve come to the right place. Here are seven ways to reduce costs today.

Also Read: Personal Finance: Do not rush in taking a car loan, if you take care of these 6 things, you will get more benefit

What Is a Cost Reduction Strategy?

Cost reduction strategies in companies is the process of cutting costs. The aim is to slash costs while boosting productivity, accelerating processes, and maximizing resources.

Note that cost reduction strategies are crucial for new businesses because they likely don’t have the revenue to balance out the cost of running their company.

The 7 Best Cost Reduction Strategies

It’s time to jump into the most popular cost reduction methods so your business thrives. Still on the fence? Then check out these examples:

1. Outsource Business Tasks

One of the top operational cost reduction strategies is to outsource wherever possible. If you’re a small business then you won’t need a full-time web developer, copywriter, and graphic designer. You should either offer part-time roles or outsource special tasks so you don’t have a huge payroll to fund.

Once you note these reasons to consider outsourcing, know there may be a high upfront cost but it’s far more affordable than funding a full-time salary.

2. Reduce Utility Bills

Looking for overhead cost reduction strategies? Then consider your utility bills and make adjustments where necessary.

Also Read: Learn how to beat your competitors with better Customer Experience

Start by monitoring how much electricity your office uses and make sure you unplug unused appliances, turn off lights when needed, and allow natural light to pour into rooms. You should also switch to energy-efficient light bulbs, check your HVAC system so there are no leaks, and upgrade to a programmable thermostat.

This will follow a schedule by increasing the heat or AC in the morning and shutting down outside of business hours so you save a fortune. Further, business owners should consider the location of their office. It’s wise to choose a less in-demand area and possibly downsize if you don’t need the extra space.

If you’re eager to cut back then consider renting a coworking space so you can funnel rent money into more important areas like marketing.

3. Use Technology Solutions

Although the initial cost seems overwhelming, you save more money in the long run when you invest in technology solutions. Cloud computing, for example, is a cost-effective storage solution because you needn’t buy expensive servers and you get access to better bandwidth.

You should also hold meetings virtually so you save on company time and gas money. And instead of splurging on multiple software, use free ones like Trello or Google docs to organize and centralize your team’s workflow. These collaborative tools let your employees collaborate effectively so they don’t waste time sorting out paper documents or printing out spreadsheets.

4. Negotiate With Vendors

Many business owners forget that they can negotiate many overhead costs. For instance, ask your landlord if they’d accept a reduced rate if you pay a fraction upfront or agree to a prolonged lease.

You should also contact your supplier and negotiate a mutually beneficial price without compromising the quality of the goods. To do this, you must convince them that your business is a profitable venture so they can profit off it too. If they don’t budge, then shop around to find a better price whether it’s for office supplies or shipping services.

Also Read: How to Promote Diversity in the Workplace?

5. Prioritize Time Management

As they say, “time is money” so consider how well you and your team are using office hours.

Although stopping by a co-worker’s desk or going for multiple cups of coffee seems harmless, these lost minutes add up so find ways to prevent this. For example, reduce overwhelming tasks into chunks or encourage workers to take smaller, more frequent breaks so they stay motivated.

You should also minimize distractions by encouraging employees to use apps like Focus Booster so they tackle important tasks first. Further, set expectations for how long projects should take and offer incentives if it’s finished within a timely fashion.

6. Use Modern Marketing Methods

Businesses needn’t spend a fortune on their marketing strategy and instead, maximize the tools they currently have. Instead of paid advertising, boost your presence online, network at events, and ask customers to leave glowing reviews to further your reach.

And don’t forget how powerful word of mouth is. Set up referral programs, promo codes, and coupons so your business reaches new eyes with minimal cost and effort.

7. Consider Your Business Bank Accounts

Without knowing it, you may be losing money because of credit card fees or high-interest rates. Consider your current bank account and make sure it’s targeted at small business owners, has plenty of cashback rewards, and low-interest rates.

Don’t want to change banks? Then ask your current one what they can offer you because you may discover perks you weren’t initially aware of.

These Are the Top Cost Reduction Strategy Options

Hopefully, after reading this article, you now know what your cost reduction strategy is.

Also Read: How Can a Business Reduce Costs By Applying Automation?

Start by pinpointing areas that are costing you and adapt. Make sure you outsource projects when necessary, cut utility bills, and get creative with your marketing strategy. You should also check whether your bank offers any perks and negotiate with vendors to strike the best deal. Good luck!

Did you find this article helpful? If yes, check out our posts to find out the latest News.

Up Next

IRFC shares will be released today, this is how you can check status online

Don't Miss

Raj Thackeray’s letter to RBI Governor about the manner of debt recovery by banks, cooperatives

Erica Jones

World

New Class-Action Lawsuit Accuses Rivian of Making Materially False and Misleading Statements

Published

17 hours ago

April 25, 2024

Manoj Nair

New Class-Action Lawsuit Accuses Rivian of Making Materially False and Misleading Statements

Electric vehicle manufacturer Rivian has been slapped with a lawsuit which alleged that the company misled the investors with false claims regarding its business, operations and prospects.

The class-action lawsuit made a number of allegations which included overstating the demand of its Electric vehicles and also not making it clear how it will handle the negative and near-term macroeconomic impacts.

The lawsuit also revealed that Rivian’s business was experiencing reduced demands as well as increased customer cancellations precipitated by inter alia, high interest rates.

The orders had significantly reduced and this has significantly reduced the profits and the manufacturing of vehicles in 2024.

Rivian Faces New Class-Action Lawsuit Alleging Deceptive Statements

The lawsuit also alleged that the Company’s public statements were materially false and misleading at all relevant times.

Rivian’s stock, like all other EV startups, has been tanking and this has angered the investors who saw a major portion of their investments eroded and a number of law firms like Bernstein Liebhard LLP announced this week that it has filed a securities class action lawsuit on investors’ behalf.

The lawsuit stated that the EV manufacturer had violated the Securities Exchange Act of 1934 and has asked investors who had bought shares of Rivian Automotive, Inc. between March 1, 2023, and February 21, 2024, to join its suit.

The company’s stocks have fallen and one of the primary reasons was the high interest rates. Rivian’s products are beyond the reach of an average income household.

Also Read: Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

The Rivian’s Electric vehicles target customers were wealthier clients and the spurt in order cancellations means this class is walking away from Rivian’s product.

The stocks of the company were popular for the investors but the reduced demands caused by higher borrowing cost have hit its stock prices badly.

The price war has also affected the EV sector and the company also with its competitors like Tesla has been uniformly affected.

The EV sector marked value has tanked by more than 57% year-to-date.

The chance of a fall in interest rates is not expected since the Federal Reserve will not lower the benchmark interest rate since it could lead to a bout of hyperinflation.

Also another factor which will discourage the Federal Reserve to lower interest rates is the soaring energy prices caused by the war in Ukraine and the Middle East.

Also Read: Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

World

Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

Published

20 hours ago

April 25, 2024

Manoj Nair

Lawsuit Claims Kennywood Concealed Steel Curtain Closure to Boost Sales

Kennywood’s Steel Curtain roller coaster will not be available this 2024 season, and this has miffed a Kensington man to the extent that he has filed a lawsuit against Kennywood and its parent companies, alleging that the officials had known this fact long before but withheld it to boost season pass sales.

Lawsuit Against Kennywood

The lawsuit, filed in the Allegheny County Common Pleas Court by Joshua Miller and his attorney, John A. Biedrzycki III on Monday, alleges that it was a deliberate attempt to hide the fact to accrue financial benefits by boosting season pass sales.

The lawsuit alleges that Kennywood has created advertising campaigns targeting consumers like Mr. Miller and others to purchase the 2024 season pass under the belief that the benefits included myriad park attractions, including the Steel Curtain.

In the lawsuit, it was revealed that Mr. Miller bought his season pass under the assumption that all rides would be operational.

However, on April 17, three days before the park opened for the season, it was revealed that Steel Curtain would be closed for the season.

The announcement was made by Ricky Spicuzza, the park’s assistant general manager, and the reason for the closure was cited as the coaster undergoing an “extensive modification project.”

Ricky Spicuzza said,

“We understand the frustration many of you have felt not being able to experience the Steel Curtain. On behalf of our entire team, we absolutely share that frustration with you.”

However, the lawsuit contends that the fact was known long before last week that the 220-foot-tall coaster would be out of commission.

The lawsuit states,

“The company withheld this information from season pass purchasers so as not to lose season pass customers, or, alternatively, so as not to offer a discount on season passes due to the unavailability of the Steel Curtain.”

The lawsuit also details numerous violations of the state’s unfair trade practices and consumer protection law. This includes failure to disclose the Steel Curtain’s closure with the full knowledge that the consumer believed that it would be functional for the 2024 season.

The park offered varied passes, which ranged from season passes priced from $109.99 to $239.99.

The lowest endowed pass was the bronze pass, which provided unfettered admission except on certain blackout dates.

The premium range included the platinum pass, which offered year-round admission to Kennywood, Sandcastle, Idlewild, and Palace Entertainment’s Dutch Wonderland in Lancaster.

Additionally, it also offered free parking, discounts on food and retail, and three free guest tickets.

Also Read: Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

World

Prime Hydration Faces Lawsuits Claiming Its Sports Drink, Prime Energy, Contains PFAS and Excessive Caffeine

Published

2 days ago

April 24, 2024

Manoj Nair

Prime Energy, the sports drink from Prime Hydration, has been hit by a number of lawsuits for containing excessive amounts of caffeine and PFAS. Another lawsuit was filed on April 8 in the Southern District of New York, accusing Prime Hydration, the parent company which manufactures the sports drink, of engaging in misleading and deceptive practices.

Prime Hydration was founded by two Logan Paul and KSI in 2022, and the products became very popular thanks to the huge followings of the YouTubers. However, the company is now facing a slew of lawsuits over the ingredients in their energy and sports drinks.

New Lawsuit Against Prime Hydration

The latest lawsuit, filed on April 8, accuses the company’s 12-ounce energy drinks of containing 215-225 milligrams of caffeine, exceeding the permissible limit of 200 milligrams. The lawsuit was filed by Lara Vera, a resident of Poughkeepsie, New York.

The lawsuit details that the plaintiff had purchased Prime’s Blue Raspberry products on numerous occasions in August 2022 for about $3 to $4 each, unaware that the products contained caffeine beyond the permissible limits. The plaintiff is seeking damages of $5 million from the company. Lara Vera’s lawsuit alleges that Prime advertised 200 milligrams of caffeine, which is equal to six Coke cans or two 12-ounce Red Bulls. One Red Bull can could contain 114 milligrams of caffeine.

Also Read: Johnson Controls subsidiary Tyco Fire Products to pay $750 mn to settle ‘forever chemicals’ lawsuit

The suit also alleges that there are no safe limits of caffeine for children and that caffeine has been indicted for causing tachycardia, headaches, convulsions, tremors, upset digestion, and adversely affecting mental health.

Earlier, Senator Charles Schumer, D-N.Y., had asked the Food and Drug Administration (FDA) to investigate Prime energy drinks in 2023 after reports that the products contained high levels of caffeine. The Senator also accused the company of using vague marketing tactics focused on young people, influencing parents to buy the caffeine-laced drinks for their kids. The lawsuit by Vera also quotes the Senator’s call to the FDA.

Prime is also facing another lawsuit filed on Aug. 2, 2023, in the Northern District of California by the Milberg law firm on behalf of Elizabeth Castillo and others. The lawsuit charges Prime’s products with using flavors containing PFAS, or “forever chemicals.” Forever chemicals are a class of chemicals that are not degraded in the human body or nature and have been indicted as a carcinogenic substance. Independent third-party testing has confirmed that Prime Hydration grape flavor contained PFAS.

Also Read: California mother files lawsuit against Tesla after her 2-year-old child starts Model X and runs over her