While it's true that your people are your biggest asset, it's also true that labor makes up the lion's share of your costs--and that includes indirect administrative and management salaries. "It is important that you evaluate your staff just as you would your material resources," Ewing reminds. "You must analyze every labor dollar to determine that each provides value to your customer."
Building rent and lease expense presents another savings opportunity in today's economy. "It never hurts to ask your landlord for any help he can offer," Ewing says. "Landlords want to keep tenants. Sometimes it costs them more to find new tenants than it does to renegotiate your terms. It's always worth exploring--even if it means you pay more later when work is easier to come by."
Additional overhead savings opportunities include:
• Consult with your insurance agent to look for ways to save on your auto, health, general liability and workers' compensation policies
• Cancel insurance on vehicles and equipment that are not in use
• Look at your phone services - do you really need every cell phone, are they all being used?
• Professional fees such as legal fees and accounting fees should be spent wisely
• If your company uses uniforms, are there ways to save money yet still maintain the image that is important to you?
• Turn off lights and heaters when not in use
• Return idle equipment rentals
• Monitor personal use of company vehicles
• Order inventory supplies only as needed
• Comparative shop for all supplies and services
• Sell idle assets
• Ask your management staff to produce written cost savings plans that eliminate unnecessary expenses in their departments
• Eliminate perks and recognize that cost saving starts at the top, with you
"At the end of the day, all cost saving plans should be achieved through a team approach," Ewing reminds. "Make sure you have the support and buy-in from your staff. Asking for their opinions and suggestions regarding cost savings helps provide a healthy approach. Ultimately you will need their support in managing your business, through both good times and bad."