How do you perform Cutting Cost Operations?

1- Cut off direct / indirect labor cost.

2- Raw material management to avoid expiry.

3- Cut down utility cost (particularly unnecessary)

4- Optimize marketing & promotional budget.

5- Cut down travel expenses.

Step1

Lower labor costs by increasing performance. When employees perform poorly, your labor costs increase, due to the need for more employees or because projects get completed late. When labor costs increase, profit margins decrease. To decrease labor costs, place an emphasis on high employee performance. Doing so involves training your employees thoroughly, hiring candidates that are best fit for the job, and reviewing employee performance consistently. Performance may also increase when motivational rewards are introduced.

Step2

Order enough materials to run your business, but so much that you’re forced to waste. This only concerns certain businesses whose raw materials expire, such as those in the food industry. Wasting raw materials causes operational expenses to skyrocket, and profit margins to plummet. The best way to avoid waste is to base orders for raw materials off of estimated sales by looking at same-day sales from the previous year. For instance, look at the restaurant industry. A restaurant that orders three cases of strawberries and only goes through one in two weeks will have wasted two-thirds of its order.

Step3

Cut down on utility costs by implementing cost-saving equipment, such as CFL bulbs and Energy Star products. Turn off lights and computers once the workday ends, and make sure you’re using as little energy as possible.

Step4

Set a marketing budget. Advertising can quickly erase profit margins. Without setting a budget, your advertising expenses may surpass the funds you can safely spend.

Step5

Reduce travel expenses. While it’s not good for business to cut out travel expenses altogether — especially when traveling could mean landing a new client or selling a product — some means of travel can be reduced. For example, rather than paying for candidates to travel to your company’s office for an interview, conduct the interview over the phone or via video chat.

Step6

Purchase used equipment, or lease, when older equipment becomes inoperable. Rather than spending money for new, spend less money on older but operable equipment. Doing so can save you thousands when you have to buy expensive equipment, such as printers and copiers. If you do not wish to buy equipment, consider leasing. Small Business Informer explains that leasing equipment allows you to make a change for new equipment after the lease is up.

Operational costs involve any expenses related to running your business, such as labor and office costs. Profit margin serves as the percentage of profit made from each sale. Operational expenses have a direct effect on your business' profit margin. This number tells a story of how well you controlled expenses, which can help or hurt in attracting investors and bolstering your company’s stock.

Beautiful and complete answers given, to vote up!

I agree with Mr. Jetley and Nassir .. no need to add any thing else

Thank you for the invitation, but I don't know much about this, and will leave it to the expert