#5 Ways Entrepreneurs Can Control Cost And Keep It At The Lowest
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Impressive revenue growth is universally the goal of almost every business and it is quite naturally so. Stagnation is synonymous to death.
However, the need to focus on cost-cutting is equally important for entrepreneurship and business.
If not monitored under constant watchfulness, companies can land up in an uncompetitive situation with inflated overhead.
The sporadic slashing and burning that become necessary in such situations, often significantly harm a company and its culture. To maintain the appropriate cost structure, one has to control it in a sustained fashion.
In an exclusive interview with Entrepreneur India, Debasish Dutta, Managing Partner and Director (Projects), Orange Corp, Global, elaborated on 5 distinct ways in which entrepreneurs can control cost and keep it to a minimum.
Think before committing on Fixed Expenses
“Any expense for business is broadly classified under “Fixed” & “Variable”. Fixed expense is referred to as “Overhead” cost as this may reduce the pace of progress. Thus, it has to be the priority always to think and rethink before committing to any fixed expense. A business can excel provided one is less beleaguered with finances and expenditures,” he said.
Don’t Invest on Office Space Initially
Dutta advised to start with a home office concept till one generates some revenue to set up a separate office. “It is also better if there is any family member to receive business calls or take note of things if a need arises in your absence. In case you are compelled to take a separate office space, keep the cost as low as possible,” he added.
Look For People who can Multitask
Dutta maintained that manpower hiring should be done with care and it was important to judge whether the person would be able to do a multitasking for your business. He advised one should not jump for defining job roles till he/she is sure of the same.
“People who have exposure of working in MNC and then turned to be a businessman often make this mistake and end up exhausting almost every bit of his/her earning. An organised approach is good, but it’s still better to save which is equivalent to money earned,” asserts the ace professional.
Choose Your Gadget Wisely
“Work with a laptop even if this costs a bit more than a personal computer for better flexibility. Buy a branded laptop and don’t go for an assembled one. This will ensure reputation in front of your client and improve your brand image. Try to get one with 3 years warranty to have peace of mind and will also reduce recurring cost,” he suggests.
Dutta prescribes telephone connections which give better value for money and keep the fixed cost low. “Electricity bill often gives a headache and hence make sure that lights, fans, air conditioners are put off when not in use. This will also make you responsible citizen at large,” he lays down.
Organise Your Funds after Due Diligence
Given that businesses need funds, Dutta opined that one had to be careful have proper access to information before deciding on organising funds.
“In case you intend to take a loan for meeting your business expenses, avoid using a credit card as a source of finance. The rate of interest can range from 30% - 45% per annum depending on the bank. Apply for a business loan instead which is an unsecured loan and compare rate from at least 2 / 3 banks. The banks will generally offer a rate of 15% - 17% per annum which is still better for a start up in case you don’t have an alternative source of finance. Don’t put all your earnings into business. Take a bigger repayment time frame so that you are comfortable in repayment,” he recommended.