A lean thinking framework can help leaders trim excess costs in their business or organization. But to maximize the impact of your efforts, it’s important to look everywhere for signs of wasteful spending.
The members of Fast Company Executive Board know how easy it is for leaders to overlook key business areas and functions when applying lean thinking. Below, 15 of them share the most common places business owners forget to look when reducing costs, and how exploring those areas can help your company cut expenses and streamline the budget.
1. LEVERAGE CONTENT ACROSS MULTIPLE PLATFORMS.
I’ve always been a huge fan of lean marketing. I don’t mean lowball your marketing, but make every dollar count. Great content provides great value! It can be leveraged over multiple formats (video, podcast, webinar, white paper, blogs, and articles) and over multiple platforms (publications, website, and social media channels). Spend money on great content and leverage the hell out of it! – Philip Stoten, SCOOP
2. MEASURE PEOPLE, TIME, AND EFFECTIVENESS.
Hidden costs are everywhere. You create value not in the dollars but in the cents you’re able to save, so look everywhere but start from the basics. The basics, from my point of view, are in the non-useful human resources. Measure “people, time, and effectiveness.” In other words, ensure people are working above 65%, and you will save money and accelerate results. – Fernando Anzures, EXMA Global
3. ENSURE KPIS ARE UP-TO-DATE.
Any function, department, or person who does not have a KPI or has a KPI that is not aligned with the business goal is likely to have inefficiency. If it is not measured, it is likely unmanaged. KPIs cannot be static; they should change over time as business priorities change. The role of management is to ensure KPIs are up-to-date and everyone understands their KPIs. – Pawan Mehra, cKinetics Inc
4. CUT NON-ESSENTIAL MEETINGS.
Stop non-essential company- and department-wide meetings. Regardless of whether you have salaried or hourly wage workers, these “all included” meetings are usually too long and wasteful of your employees’ time. To stay lean, pick up the phone, use a company chat, email, or even video message to inform and update employees of what they need to know. Save company gatherings for special events. – Viveka Von Rosen, Vengreso
5. AUDIT YOUR SUBSCRIPTION EXPENSES.
Subscriptions! Remember when you were trying out a few different tools as a solution to a problem you were having and signed up for the free (and then paid) trial? Or when you tied them to a credit card (or even worse: PayPal), just to forget them totally? Doing an audit of your subscription expenses on a quarterly basis could save you enough money to pay bonuses in some cases. – Christopher Tompkins, The Go! Agency
6. CUT BACK ON PAID SERVICES AND PROGRAMS.
Eliminate program and subscription redundancies. Create one centralized list of all current paid services. Identify programs that provide the same function. Cutting down on the number of programs you are utilizing will result in cost-saving for the organization. – Kelley Higney, Bug Bite Thing
7. DON’T INVEST IN TOO MANY OLD-SCHOOL MARKETING TACTICS.
You don’t need to spend so much budget on old-school marketing tactics, like sponsorships, groups and events, whitepapers, and what-not. Focus on building an amazing brand with a nice tone of voice, and you’ll get more traction than you believe. – Yoav Vilner, Walnut
8. DO A FULL-BUDGET AUDIT.
It is easy to say just cut travel expenses. Instead, do a full budget audit and allocate some of your previous spendings into better investments for your team, like remote tools that encourage collaboration or childcare benefits that allow your employees to feel more productive working from home. It’s less about cutting wasteful spending and more about investing in supporting your team in impactful ways. – Heather Hatlo Porter, Chegg, Inc.
9. REVISIT YOUR OWN BUDGET.
10. DON’T OVERLOOK MARKETING.
Many businesses overlook marketing. From merchandise to excessive salaries for limited or non-specialized employees, to time spend on ineffective areas to ad buying without the proper knowledge, this is the mistake I see most entrepreneurs I mentor make time and time again. – Richard RB Botto, Stage 32
11. RESEARCH AND DEVELOP STRATEGIES FOR ADS.
I can’t tell you how many customers I have who thought they could just roll out the same ads with no real understanding of how they work. Ads cost money, and if they are ineffective, they are a lot of wasted money. Doing research and developing a real strategy based on your actual customer base means that you can create ads that actually generate an ROI. – Jason Hall, Five Channels
12. CONDUCT A FINANCIAL AUDIT.
Have your finance team look into all company expenses. Make sure there aren’t any subscription costs other than what is currently being fully utilized by team members. Also, be sure to conserve things like electricity, other utilities, or other sustainability costs when possible. Just make sure you are always getting the most efficient costs for your goods and services. – John Hall, Calendar
13. OPTIMIZE MARKETING SPEND TOWARD KPIS.
It’s important to spend on marketing, but it’s even more important to ensure your efforts are measurable with clear KPIs so you can scale down underperforming marketing tactics. By optimizing your marketing spend towards performance KPIs, such as conversions, consistently, you can both cut wasteful spending and drive additional growth by scaling up the right spending. – Fehzan Ali, Adscend Media LLC
14. OUTSOURCE RATHER THAN HIRING IN-HOUSE.
Much can be outsourced that business owners tend to seek employees for. The next time you are considering hiring for a new position, ask: Could a freelancer or contract worker perform this function? You should also consider whether it can be automated. – Gergo Vari, Lensa
15. CUT BACK ON MARKETING TOOLS.
Many business owners invest heavily in marketing tools. However, most expensive tools have features you’re never going to use, and you’ll easily find free tools to do the job you need if you do a bit of research. For example, there are free crowd-sourced photo editing tools, SEO tools, and even AI copywriting platforms. Get rid of unnecessary subscriptions to reduce costs and boost profits. – Syed Balkhi, WPBeginner