Welcome to Upscaled’s debrief on our first Linkedin pole which we ran last week. We had some fantastic engagement, so let’s get straight into what some leaders from around Australia had to say.
The question we asked was: Whats the biggest challenge facing C-level leaders in 2023? We provided 4 options being: Top line growth, cost creep with inflation, Talant attration & retention or finally we gave participants the opportunity to nominate another item. So onto the results; In 1st place, the biggest challenge advised by the voters was Cost creep 43%. Just behind in 2nd place was talent attraction and retention with 41%, and perhaps most surprisingly was 3rd being top line growth with only 16% of the vote. I’m not sure what you think, but it’s probably been a very long time since Australian leaders don’t have top line growth at the very top of this list. It clearly shows that executives around the country are shifting their priorities as some of the macro conditions move around post COVID. So given, cost creep is # 1 on the list, we thought we’d spend just a few minutes giving you a few simple strategies on ways you can overcome this challenge in this environment. So cost creep. Well as you likely know, running a successful business often involves managing expenses efficiently, especially in areas that consume the bulk of your operating expense budget. These costs are typically broken down into three key areas; being 1. Properties, 2. People and 3. Platforms. So I wanted to spend a few minutes giving you a few ideas on how you can scale, whilst keeping these cost areas under control
1. Properties:
We’ve personally been involved in over 30 property transactions across Australia in the last 10 years covering start-up space, large office space & fitout, warehouses, and large scale industrial land. The key things to keep in mind when procuring property are; a. Consider a Virtual Office: A virtual office can provide businesses with a professional address, phone number, and meeting space, without the cost of a physical office. Virtual offices are ideal for businesses that do not require a physical presence and can save money on rent, utilities, and office supplies. b. Rent a Shared Office Space: Renting a shared office space can help businesses save money on rent and utilities. Shared office spaces typically offer amenities such as meeting rooms, high-speed internet, and office equipment. They are ideal for businesses that require a physical presence but do not need a dedicated office. c. Negotiate Rent and Lease Terms: Negotiating rent and lease terms can help businesses save money on rent. Negotiating can lead to reduced rent, longer lease terms, or better amenities. It is important to negotiate early and to understand the local rental market. d. Move to a Cheaper Location: Moving to a cheaper location can help businesses save money on rent, utilities, and taxes. Moving to a less expensive location may also provide access to a larger pool of potential employees.
2. People:
The cost of human resources is one of the biggest expenses for most companies. Here are some ways to minimize costs in this area: a. Outsource: One way to save on employee costs is by outsourcing non-core business activities. This may include functions such as accounting, IT, or customer service. Outsourcing can provide significant cost savings as it eliminates the need to hire full-time employees and reduces overhead expenses. b. Embrace Telecommuting: Embracing telecommuting can save businesses money on rent, utilities, and office supplies. It also reduces the need for a large office space, which can be a significant cost for businesses. Telecommuting can also reduce employee turnover, increase job satisfaction, and boost productivity. c. Implement Flexible Work Hours: Flexible work hours can help businesses save money by reducing the need for overtime pay. They can also increase employee morale and work-life balance. Additionally, offering flexible work hours can attract and retain top talent. d. Utilize Part-time Employees: Utilizing part-time employees can help businesses save money on payroll expenses. This is especially useful for businesses with fluctuating workloads. Part-time employees can provide much-needed help during peak periods, without the cost of full-time staff.
3. Platforms
The cost of platforms, including software and hardware, can be a significant expense for businesses. Here are some ways to minimize costs in this area: a. Utilize Open-Source Software: Open-source software is free to use and can provide businesses with powerful tools, such as database management, website development, and email marketing. Open-source software can also be customized to meet the specific needs of a business. b. Leverage Cloud Services: Leveraging cloud services can help businesses save money on hardware expenses. Cloud services provide access to powerful computing resources, without the need to purchase and maintain expensive hardware. Cloud services can also be scaled up or down, depending on business needs. c. Rent Hardware: Renting hardware can help businesses save money on upfront expenses. Renting can provide access to the latest technology, without the need to invest in expensive hardware. It is important to carefully consider rental agreements and to understand the total cost of ownership. d. Consolidate Platforms: Consolidating platforms can help businesses save money on licensing fees, maintenance, and training. By using fewer platforms, businesses can simplify their operations and reduce the need for specialized staff. This can also help to reduce the risk of errors and improve overall productivity. So your cheat sheet for minimising business costs?: Minimizing expenses in people, properties, and platforms can help your businesses save money and improve your bottom line. By outsourcing non-core business activities, embracing telecommuting, implementing flexible work hours, and utilizing part-time employees, businesses can save money on payroll expenses. By considering a virtual office, renting a shared office space, negotiating rent and lease terms, and moving to a cheaper location, businesses can save money on rent and utilities. By utilizing open-source software, leveraging cloud services, renting hardware, and consolidating platforms, businesses can save money on platform expenses. It is important to carefully consider each option and to choose the ones that best fit the specific needs of the business. By implementing cost-saving measures in these three areas, businesses can position themselves for long-term success.
If you want some support in managing your cost base, reach out to us.
