Thousands of business all over the world fold up daily due to high operational cost. It is worst in Africa due to high energy costs, lack of infrastructures and unfavourable Government policies. Many African countries don’t have power from the national grid, leaving business owners with no options than to generate their power using generating set, powered by diesel and petrol.
. Another setback for companies in Africa is the fact that they have not fully embraced technologies in their daily operations. There are many companies that should be operating from the comfort of their homes but yet they go all out to rent a big office-space because they operate manually. The advantage of working from home are so enormous that it can triple any company’s income at the end of the year if it is fully embraced.
Here are how you can reduce operational costs;
1 .Embrace Technology: Technology allows you do more with less manual involvement. It saves costs of paying for manual labour, and reduces stress. Many Airlines for example are using the app called EchoVera AP Automation solution to automate its processing of supplier invoices. Many functional APPS are being developed daily, find the one that suit your business solutions and take advantage of it.
2. Cut spending on energy: This is very important especially in Africa where energy is scarce and expensive.The cost of running a generator can bite into your profit.You manage your energy bills by reducing consumption through reduction in number of appliances, time of usage etc. Don’t put on your power generating set for pleasure if you don’t have business at hand.Make sure you put off all appliances and the entire connection unit at the close of work if you have an office-space.
3. Embrace par-time workers: I have come to realise that many workers in some offices only work for few hours daily and remains idle throughout the rest of the day. This is not their fault because sometimes their job is time bound and deliverables deadlines might be in the morning alone or afternoon or evening. I am talking from experience as a former head of media unit of a big Public Relations firm in Lagos,Nigeria. I found out that most of the people working under me only had jobs in the morning and they remain idle for the rest of the day because they have nothing much else to do apart from some few reports.This is due to the routine nature of their job descriptions. In this case, those staff can be placed on part-time and their salary reduced. Some can even work from home to save office space and consumption.
4. Outsources some jobs: Instead of employing full time staff to carry out a one-off project for example, you can simply outsource it to skilled workers, you will save on labour and still get quality work delivered.
5. Put a system in place:If you put a system in place, you will save yourself the cost of hiring more staff who will make mistakes because of lack of established protocol. Meanwhile, you could be running a leaner operation if you had processes and procedures your team members could follow.You must put in place a clearly defined process that enable things run smoothly an efficiently without staff coming to you for answers to some tasks
6. Make room for relaxation/retreats: This may sound off to you but it has relationship with productivity.The popular saying “all work and no play makes jack a dull boy” is very real. If you give your staff time off for retreat and entertainment, they will be more productive, less stressed out and as such, staff will take less sick leave which would have naturally bite into your time and reduce productivity.
Use cars with smaller engine as your pull car: Instead of using a V8 engine car which guzzles gas, why don’t you acquire smaller cars with four cylinders that saves fuel and cost less to maintain?
Finally, as an entrepreneur, you must know that your daily little unnecessary spending which you deemed insignificant can reduce your profits. Don’t take them for granted.