In a difficult operating environment such as Ghana’s economy at the moment, your business might require adjustment in order to survive and/or grow. Frequently, such adjustment, or restructuring, involves some level of cost cutting. When properly managed, a cost-cutting process could provide your business much needed fresh legs to pursue its goals.
Here are 3 tips that may help you in cutting costs without doing harm to your business
Don’t cut too much too quickly
Many organisations think that a bing bang approach to cost cutting is the best, arguing that front loading interventions is best for long-term gain. This approach could have catastrophic consequences for a business if too much is done too quickly. Proceeding with measured caution when cutting costs is good counsel.
Predict the impact of cuts
Estimate and analyse the impact of cuts on your business as a whole, not just on the department/division that is directly receiving the cuts. Such planning will allow you to anticipate effects and reduce the chances of making irreparable damage to your business.
Communicate with your staff
Clearly communicating the need for and anticipated results from cost-cutting measures may help reduce the damaging effects of staff resistance, dampened moral and bad press. A humane and considerate approach to cost-cutting, where it includes job losses, shows surviving employees that the organisation cares about their welfare. This can provide a subsequent boon to employee productivity.