Spending smart, as with many other things related with business, is an art form. We have all heard the adage, “Never spend your money before you’ve earned it”. And this is as a fact that many of us understand. But how do you save money, you haven’t earned yet? This is another question that we provide the answer to. How, you may ask?
By Spending Smart!
➤ Word from the wise, many people have tried and failed at this. Because they do not know how to calculate risk. They do not take into account the many stakeholders involved in the process.
➤ Their decisions, and their interests. If all of these are streamlined, we can do something that seems impossible.
But how do we Spend Smart?
➤ By motivating the work force of course! Higher the level of passion an individual has for his work, the higher will he save for his company. Imparting a mindset of ownership to the people working for your company has been shown to be favorable in this aspect.
➤ No less than 82% of organizations the world over are investing in ways to spend less, or rather, spend smart.
➤ Cost Cutting usually involves having to take a top-down approach, where a new methodology is rapidly implemented throughout a company. But recent studies have shown that, the entire process has much more to do than telling your employees on how and where and when they should spend smartly.
Remove all forms of bias from the minds of your employees:
➤ And take advantage of the ones that need to be leveraged in the best interests of the company.
Sunk-cost bias, is something that has to be taken out of the picture.
➤ Investing in a process that is, at the end of the day, redundant, isn’t doing any of us any favors. This is one thing that prevents many individuals, and organizations at large, from spending smart.
➤ The nudge effect has proven to be effective in this process. By showing your workforce how their peers in other companies are working, integrating cost-effective mechanisms into their work ethic.
Save, Save, and Save.
➤ By saving every which way you can. For example, renting a server and renting the office is a much more cost saving initiative than actually buying the hardware and purchasing the real estate. Saving should be a mentality that the whole workforce imbibes.
And with the right tools this is possible. Tools we have perfected here at Chools.
We specialize in cost benefit analysis, and activity based costing.