How To Identify And Eliminate Waste In Your Budget

How To Identify And Eliminate Waste In Your Budget
1.0]Understand the ROI for each expenditure

Return on investment, or ROI, isn’t just for the big stuff like marketing and technology. It’s time to rethink the return on investment for every expense your business incurs.

For this step, it often helps to think of your business as a brand new enterprise. If you were launching your business today, what would you change? What long-term commitments or contracts are working against you, and is there room to renegotiate or reinvent a few things and save some dollars in the process? What would you lease instead of buy, buy instead of lease?


2.0] Avoid death by a thousand cuts.

Take a look at all levels of your business in your effort to reduce waste. Can you refine your marketing strategies to reach a more targeted audience? Are you communicating with your customers too much and not optimizing each message? How can you deliver your product more efficiently? Are you paying too much for office space or paying for space you don’t maximize? This soup-to-nuts approach can help reduce incremental expenses and catch operational inefficiencies that add up to big dollars over time.

3.0]Look for repetition, redundancies and communication gaps

Examine the entire lifecycle of your operations to see if there are redundancies or unnecessary repetition and replication of duties.

Often, the view from ten thousand feet can reveal clear opportunities to streamline workflow, better divide tasks, eliminate unproductive steps and ultimately save money. Pay close attention to what consumes the largest amount of time in your business, like sourcing products, manufacturing, sales, fulfillment or customer service. Take a critical look at each phase independently to see what can be done better, and then examine how each phase works together. Is customer service missing opportunities to communicate upsell opportunities to the sales team? Are delays in fulfillment creating double work for customer service?

4.0]Tap your resources

Often, it’s the people closest to the day-to-day operation of a business that can be your best waste-reducing advocates.

Regardless of the size of your business, seek input from staff at all levels as you work to refine your budget and reduce unnecessary expenses. Reward employees who have the best suggestions for streamlining processes.

5.0]Formalize efficiency reviews

Businesses are constantly changing and evolving. So it's important to continuously review how things are done and how things can be done better, smarter and faster. Consider scheduling a periodic efficiency audit or creating a permanent team that is tasked with identifying and reducing waste on an ongoing basis. But watch out that your efficiency committee doesn’t become a source of inefficiency itself. Look for concrete results, and empower committee members to review and vet each new opportunity to curb waste and bring only the best options to you for final approval.