If you’ve been following my blog, you understand the reasons you should use an expense reduction analyst for business cost reduction. But how do you select one? Here are 6 important elements to consider when choosing a business cost reduction consultant:
- Results Driven Objectives
- Comprehensive Cost Reduction Analysis
- Subject Matter Expertise
- Multiple Cost Reduction Strategies
- Transparency in Cost Savings
- Success Based Compensation
Has the consultant demonstrated the ability to deliver results? Does he or she consistently follow through on commitments and meet agreed upon deadlines? Has he or she produced significant cost savings for other clients?
Comprehensive Cost Reduction Analysis
How many business overhead expense areas will be analyzed? To maximize your cost savings and cash flow, the cost reduction analysis should be comprehensive. Since you have made a commitment to work with a cost reduction consultant, you should obtain as much value as possible.
Subject Matter Expertise
Has the cost reduction analyst demonstrated deep knowledge in each area of the expense reduction analysis? Subject matter expertise is the key to uncovering meaningful cost savings.
Multiple Cost Reduction Strategies
Does the expense reduction consultant employ multiple expense reduction strategies? A consultant that employs multiple cost reduction strategies is less likely to “miss” cost savings opportunities than one who relies on only one strategy.
Transparency in Cost Savings
Will the expense reduction analyst explain exactly how and where cost savings are achieved? Cost saving recommendations should be transparent, simple and easy to understand. If there is no explanation, or the methods used to achieve the savings are unclear, you should question the likelihood of benefiting from the savings.
Success Based Compensation
Is the analyst compensated by sharing in the identified cost savings, or does he or she earn a fee regardless of whether savings are identified for your business? Is the analyst’s compensation paid one time or residualized over months or years? An expense reduction analyst that shares in the identified cost savings is highly motivated to reduce your expenses as much as possible. Your goals and his or hers are aligned which means higher cost savings for your business.
Once you’ve answered these questions, you’ll be ready to choose a cost reduction consultant that will benefit your business.
We’re curious, are there other criteria that you feel are important to consider? Let us know -- post a comment!