The Institue of Directors offers 10 suggestions of ways for businesses to cut costs without cutting performance levels below:
1. Keep staff on board
Cost-cutting measures are often unpopular, but when staff understand that their jobs may depend on them, they'll play along.
2. Improve business forecasting
When you have a clearer picture of future trading conditions, you can make more reliable resourcing decisions, on everything from staff levels to materials and marketing spend.
3. Analyse spending
Map outlay on goods and services along a horizontal axis and criticality of purchases up a vertical axis. Divide box into four quadrants. Focus on purchases that fall into the top right-hand quadrant.
4. Review utility costs
Typically, these represent the second- or third-biggest single controllable cost. Shop around to cut utility charges.
5. Control business travel
Some journeys aren't really needed. Look at the purpose of long trips and whether you can get what you need another way, through a videoconference or webcam meeting, for example.
6. Cut the cost of debt
It's excessive (and sometimes expensive) debt that sinks many businesses. Look at reducing the cost of debt by an injection of equity.
7. Automate routine processes
Provide more information on your website. Ask customers to order online.
8. Explore offshore manufacturing
Consider whether all or parts of your products can be manufactured in the Far East or eastern Europe.
9. Use consultants sparingly
Sometimes they save you money-more often, they cost. Consider asking them to work on a contingency basis.
10. Cut directors' perks
It's tough to start at the top, but it sets the right example to the rest of the company.
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