There are two ways of growing business profits: increase sales and reduce costs. A wise reduction of costs is key to improving customer satisfaction, winning customer loyalty and growing your business in the long term. It is not easy though, as making a wrong decision in cutting costs may have quite the adverse effects on the business. Not lowering the costs, however, will expose your business to even higher risks.
Let me suggest 5 steps to cut costs but increase efficiency at the same time.
Optimize vendor selection
We all like working with people who are positive, responsive and always ready to take on new tasks. Project Managers are the same. That is why it is so natural for them to work with vendors that they know best and like most. But, always assigning new jobs to the same pool of vendors may be far from optimal. There is a great solution to this situation. By automating the process of checking vendor availability and assigning new jobs, you can benefit in three ways:
- Communicate with more vendors on a regular basis,
- Cuts costs by allocating projects to new vendors who offer lower rates or are willing to negotiate,
- Assign new jobs quicker and start projects sooner.
Automate in-house tasks
Everyday tasks differ in terms of the value they generate. In fact, 20% of work produces 80% of value. That is why it is so crucial to identify tasks that are repetitive, generate little value and can be automated. Should we be afraid to replace people with machines? No! We are talking about eliminating mundane tasks that can be done automatically. That helps to focus people’s attention on task that are of key importance to a company and its clients. Within each project, big or small, there are dozens of short activities. Automated or semi-automated workflows define which tasks will be done without human involvement.
The more advanced you become in automating, the lower the internal costs you have to bear with each subsequent project. That way, your team will have more time for important tasks and client care.
Reward the use of automation
There is one key element about automation. In order for automation to bring benefits, you have to use it. That might sound quite obvious. But implementing automation means changing habits and work processes. It is something that people don’t like. This is why it is important to reward the use of automation. Whether it is a bonus, gift, commission plan or just a handshake – offer something to your team for switching to this new way of working.
Work with clients through online tools
Automation of tasks should not be limited to your internal processes. There is a lot it can do to improve communication with your clients. It does not matter whether it is delivering a quote, creation of a new project, delivering translations or issuing invoices. All these tasks can be done through an online collaboration tool. It benefits both parties: your client and your translation agency. Thanks to an online tool you are available to your clients 24 hours a day – weekends included.
Additionally, you give your clients a sense of control and even an opportunity to automatically start a project when they need it. Clients really appreciate that! At the same time, the options selected by the client appear in your central system. That saves even more time and lowers your internal operational costs.
Analyze the profitability per client
We often hear that every customer is important and a company cares equally for each of them. But should it be that way? Not all clients are a good fit for your company. And your company is not the best fit best for all clients. It is good practice to regularly analyze the effort spent on each client compared with the overall profit generated by them. There will always be a few clients that are your best. They are your cash cows and you make lots of money on them. On the other hand, there will be clients that are more trouble than they are worth. Cut them off and focus on expanding your best clients. Not only will you cut costs and increase revenues, but you will also experience much higher work satisfaction.
There are lots of ways to cut costs. You should start with auditing them on a regular basis. Then always keep looking for opportunities to lower them in a way that makes your company stronger.