Columbia Offers Company Expense Advice
Columbia Business School recently published an revealed advice in which Alexander Tuff, President and Partner at Winged Keel Group, explains 13 ways business owners can better manage their expenses.
“Harness your headcount”
In other words, rid yourself of the “under-performers, overvalued and sacred cows who [take] away more value than they’re worth.” Outsourcing talent, despite the complex ethical and sociopolitical implications, can produce enormous savings. Tuff points out how outsourcing his company’s tech support and development saved 60 percent in costs.
“Use interns”
Low-paid interns can take on lower-value, time-consuming tasks that allow other employees to “focus on higher-value work that is commensurate with their experience and compensation.”
“Move middle or back-office workers to lower-cost locations”
Tuff says, “I’ve seen companies save some $50 million or more by moving Manhattan jobs to Jacksonville and Salt Lake City.”
“Promote telecommunicating”
Instant messaging and teleconferencing facilitate the option for a company to slice n’ dice or jettison office space altogether. “By having people work outside the office, you can rent smaller spaces or sublet the space you no longer need.”
“Negotiate and find buying power with vendors”
Tuff advises small businesses to negotiate with vendors whenever possible. Participate in consortium groups to consolidate and maximize purchasing power “for everything from office supplies to healthcare costs.” Professional Employer Organizations (PEOs) can take “on your HR functions can also reduce healthcare costs.”
“Focus on the overtime”
If you notice overtime hours start to pile up, consider hiring a temp or intern to keep the equilibrium in balance.
“Reengineer the process”
Tuff says keep your operation lean and mean with no excess fat. Simplify “processes to free up resources, lose unnecessary reports and useless weekly emails.”
“Stay focused on business, not hobbies”
Eat the frog, goes the saying. Tuff says, “Allow your company to finish less crucial projects only if you make it to certain revenue or profitability targets half way through the year.”
“Let the experts develop the software”
Unless they’re absolutely essential to your operation, off-the-shelf solutions are generally cheaper and easier to manage than customized software.
“Split the cost of events”
Partner up with vendors or other brands to split conference costs. When it comes to internal events, combine milestones, like a “joint 50th anniversary and holiday party.”
“Lose the paper addiction”
Straight up: paper is a waste of time, money and resources. “Show your work on a screen and maintain commonly asked-for material on your iPad or computer so that you can send information with ease, instead of constantly printing out the material for every meeting.”
“Become creative with space”
Office space has the potential to create enormous overhead. Tuff advises businesses who are tied down to their space to sublet. Businesses that are in flux should seek out the cheapest, smallest spaces available. New businesses should consider office shares and split a space with another business. “Analyze your space use and other large expense items separately and on a regular basis to more clearly identify opportunities to save.”
“Cut the travel and entertainment budget”
Tuff advises business owners to “staycation” instead of splurging on flights and front-row seats for the whole company: “When possible, organize teleconferences or webinars. Avoid sending the entire sales team to one conference.”
About the Author
Jonathan Pfeffer
Jonathan Pfeffer joined the Clear Admit and MetroMBA teams in 2015 after spending several years as an arts/culture writer, editor, and radio producer. In addition to his role as contributing writer at MetroMBA and contributing editor at Clear Admit, he is co-founder and lead producer of the Clear Admit MBA Admissions Podcast. He holds a BA in Film/Video, Ethnomusicology, and Media Studies from Oberlin College.
