The ASK MIKE column provides access to questions & answers from finance and small business expert Michael Gonnerman. Mike has served as a trusted advisor to hundreds of technology CEO’s and investors as well as served on more than two dozen corporate boards. The ASK MIKE column contains a mix of current as well as classic Ask Mike Q&A.
How do I convince employees to spend less?
“I’ve been trying to cut costs around the office, but it seems like everything I propose–most recently, eliminating free coffee and soda–creates a huge controversy. Are there costs I can cut that no one will notice?”
Mike: Probably, but that won’t solve the problem. The best way I know to save money is for the top person in the company–typically, the CEO–to show that cost-cutting is a top priority, and to get very visibly involved in every discussion that involves money, from raises to expense accounts. (Of course, the CEO can’t fly first class when everyone else flies coach.) Once it’s clear that the boss is genuinely concerned about saving money, most employees will jump on the bandwagon.
In addition, you should take a hard look at your three or four biggest expense areas, not just the nickel-and-dime stuff. For a technology company, salaries, rent, and travel usually represent about 75% of the company’s spending. Look for creative alternatives–part-time staffing, moving to cheaper space, less travel, competitive bids from major suppliers. If you can squeeze even 10% out of your largest expense categories, you’ll find the cost savings will be quite dramatic.
If you like the ASK MIKE Column than you will love the Ask Mike book from Michael Gonnerman. The book contains Mike’s response to actual problems encountered in 30 years as an advisor to high-tech startups and small companies. To learn more or to purchase the book click here.
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