In this current economic environment, many managers are looking at shrinking budgets and possibly even tougher times ahead. At this time, the worst thing you can do is to “do nothing.”

Action idea: Be creative about cutting costs such as overhead expenses. Whether it is ordering fewer light bulbs or scaling back on new computer equipment, this can improve your entity’s financial picture.

Here are five potential steps your entity may take to reduce overhead.

1. Examine your present costs. Before you can determine where waste exists, you need to know what your current overhead is. This includes such items as equipment, stationery, forms, mail services, phone expenses, office furniture, etc. Once you have a total for this year’s overhead, compare it to last year’s. If the trend is upward, chances are you have some cost cutting to do.
2. Get employees involved. A cost cutting memo from the top probably won’t be as effective as sitting down with employees and getting their opinions as to how overhead can best be trimmed. For instance, someone who handles mailings may be in the best position to tell you what costs can be cut. Reminder: Stress that the goal of your cost cutting program is to cut waste without affecting productivity. One idea would be to have each employee come up with, say, five ways for reducing expenses without sacrificing quality.
3. Give employees more than just credit for coming up with a cost cutting idea that saves money. You might set up some type of incentive plan. For example, a cash award equal to a predetermined percentage of the money saved from an idea is one way to get their immediate attention.
4. Control purchasing. All too often, employees have the attitude that no matter how much an item costs, your successful organization can afford it. It is important to let employees know that bargain hunting is just as vital in the office as it is at home.
5. Reuse and recycle. The same environmental standards that are observed at home should be applied on the business premises. Any item that can be reused should be reused. Any items that cannot be reused should be recycled, whenever possible. This will not only cut your purchasing costs, but it could reduce your trash collection bill as well.

These are just five possible cost-cutting measures. Of course, this list is not all-inclusive. If you put your mind to it, you can think of more. This may help your organization continue to prosper when others go into a tailspin.

For further information, contact Lewis, Hooper & Dick, LLC at (620)275-9267.

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