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Managing the dynamics of cost reduction

Over the last couple of weeks I’ve had a lot of conversations with business people about their spiralling utility costs.  In NSW particularly, business owners are genuinely concerned about how they are going to cope with soaring bills.

These conversations reminded me of a recent business management survey that said fewer than 20% of managers understand the dynamics of cost reduction and manage this area effectively.  Although this is a startling statistic, I can understand how this can happen.

In any business there are many fixed costs that we just can’t escape.  Business insurance, fixed line phone bills, mobile phone plans, electricity bills and internet access to name a few.  Ensuring these costs are managed well is a daunting task.

Integrating fixed cost management into your business planning process is the key to keeping these costs down.

Price comparison websites work hard to constantly offer new deals that will help you keep a lid on your costs.  Identify trigger points or establish a regular review schedule that fits with your budgeting process to review and renegotiate your contracts – across the board.

Providers are constantly seeking new customers and the online price comparison services are constantly updating, refreshing and revising their content, offering better deals as competitive providers fight for your business.  Don’t presume that because your provider offered the best deal six months ago they are still leading the pack.  Go back, check, and make sure you are still on the best plan for business.  Don’t forget that if you are happy with your provider but can see a better deal offered elsewhere, this is your chance to haggle.  They will do what they can to keep you, so be proactive about what you want. Remember, if you don’t ask, you don’t get.

Tim Wolfendenhttp://www.makeitcheaper.com.au
Tim Wolfenden is the CEO of Make It Cheaper, an independent energy broker providing electricity price comparison services to businesses and residences. He specialises in developing successful e-commerce strategy, commercial negotiations, online product development, strategic planning, business analytics, SEO and SEM management and tweets as @aussieonline.