Every industry has its share of good and bad days. So when they are enjoying their good days it is crucial that they keep enough reserves for any possible decline in their business and when they encounter any fall then they should be quick to adopt cost cutting measure. It is been widely observed that companies take time to adopt cost cutting measures due to which they get themselves into deeper mess and eventually some has to wind up their businesses.
Cost cutting measures do not primarily involve sacking employees though that is considered as one of the measures but that should be the last option. By sacking employees, you will be losing resources that have been with your company for many years and who know the business well. When the tide will turn, you again have to recruit new guys and train them. You may not get back the same human resources that you had sacked once. So keep that as your last option.
Bring down unnecessary expenses:-
You got to track down the overall operating and non-operating expenses in your company and have to cut down the costs that you feel is completely unnecessary. If you check your records, you will come across a lot of such expenses that should not have been done in the first place. Since you never bother to check the records, it must have occurred but this is what you need to curtail. You need to cut down all the expenses that are either not needed or not much needed by the company. Only spend the money on important things and things that are absolutely necessary for the smooth running of the business.
Rent out or sell heavy equipment that are redundant for your business:-
If you take a day’s time and check which all heavy equipment are indeed functioning, you may be surprised to know that out of the entire lot of heavy equipment you possess, you use only half the machines for your projects. Rest of the machines are not working but you still spend a good deal of money on maintaining them. That is again costing your business. Hence, it is important that you take stock of the heavy equipment that are not in use and may remain out of use of many more months so that they can be rented out to guys who need them. In case, if the machines have gone redundant, then it is advisable that you get rid of them. In this way, you will make some money for your business.
Sack employees if you really have to:-
Well, this should be the last option in your kitty. You can do this only if you feel that this is the only step you have to save your company from getting wrapped up. However, you have to take immense care before you lay off your employees. It is important that you remove people who are not good workers and often have been a pain to the company. Check their performance sheet and then take a calculated decision. Remember, once you lose them there are not much chance to get them back.