If you asked most executives how they could increase profits, the first answer is often – increase sales.  Unfortunately, it is usually easier said then done.  You have to figure out how you are going to accomplish this objective.  For example, are you going to develop a new product, come up with a new marketing program, or invest in training for your sales team?  All of these are great initiatives, however, they can take months to develop and implement and then several more months to see the results. 

The second response then turns to the other side of the business equation, i.e. expenses.  Cost cutting may not be as glamorous as developing a new marketing program but the results can usually be achieved much quicker and the impact on profits will be seen months earlier. 

In most businesses there are many areas of expenditure and it can be difficult to decide where to start.  Your first step should be to separate costs into core and non-core expenses.  Core expenses are normally your big-ticket costs, which, hopefully, are already receiving the attention that they deserve.  The non-core costs are all of the other expenses that most businesses incur just by being in business.  These costs can be a great opportunity to find immediate savings that will go directly to your bottom line.  You can realistically expect to save anywhere from 10% to 50% depending on the particular cost area.

Here are three things that you can do immediately to drive these savings:

1. View every cost as a necessary evil.  Your mindset should be to eliminate every cost you encounter.  If it can’t be eliminated then,
   
   
2. Put the burden of proof in your organization on spending money, not cutting costs.  In other words, instead of saying ‘let’s not cut Cost A unless we’re sure it is the right business decision’ you should be saying ‘ let’s not keep spending Cost A unless we’re sure we need that cost’.  It may be a subtle difference but it can have a dramatic impact.
   
   
3. View no cost as too small to worry about.  First, there is a surprising amount of money to be saved in cutting these small costs mainly because of the exact reason that no one has taken the time to look at them.  Secondly, it has a cultural impact on your employees because they will see that all costs are important and will be less likely to dismiss them as unimportant in the future.

So next time your boss asks you how the company can increase profits quickly, your first area to focus on will be all of those non-core costs.