A common-sense but nonetheless compelling piece in today’s ten-ways-cut-costs-20-part-one“>”>Management Today about 10 ways for a business to cut costs by 20 per cent without sacrificing staff.
PR agencies are time and expenses businesses in the main, yet all too often they tend to look at cutting people costs when times are tough rather than exploring all options.
Of course, salaries are the biggest cost for a PR agency. Yet there’s undoubtedly a lot of fat that can be trimmed from operating costs before the wage bill gets looked at.
So here’s my suggested top 10 of areas where agencies could look harder at their spending and retain their talent rather than take the knee-jerk people route.
1. Travel. Obvious, but it’s not all essential. And cabs can usually be reduced or cut out altogether with good planning – you could even cycle, walk or skateboard shorter distances. I’m serious.
2. Prudent culture. Agreed with MT here. Bosses should lead from the top. Tight-arse you may have to be, but if it safeguards jobs then so be it.
3. Socials. Don’t be a total killjoy, but do look at company nights out and whether those can be pruned or done cheaper. The tax bills for these can be painful.
4. Banking. While there’s turmoil at the moment, consider how you could negotiate a better deal to minimise charges.
5. Recharging. While much expenditure is a cost of doing business, too much still gets spent on a client’s behalf without the client being asked to pay for it. Often, they’d be happy to do so. Wise up.
6. Purchasing policies. Many agencies have PO policies, but few police it well. Set a limit, have a policy and watch it like a hawk. Equally, make sure everyone understands the purpose.
7. Be firm but fair. If you, for example, offer company credit cards then penalise abuse per your usage policy. If someone is always taking the p*ss, clobber them or cut the card up.
8. Question everything. Too much expenditure is borne because people think ‘this is how we’ve always done it’. If it can’t be justified, stop spending on it.
9. Develop more productive payment relationships with clients. Cash is king and a smooth flow of it helps with better cost management. The more you bond with clients over invoicing and payment, the more likely they’ll be to cough up on time.
10. Make cost control a crusade. Make sure it is always talked about and the team understands the requirements, so everyone is bought into it and understands how they can benefit.
Ouch. That wasn’t much fun. But better than having to trim the headcount.
