Multi-billionaire Warren Buffett is world renowned for his simple advice on being successful. At the heart of his essential rules for running a business is the foundation stone of his multi-billion dollar empire: "Keep costs low" is one of his basic principles for the health of his business. It should be at the heart of yours too.
Staying focused on costs leads to the overall success of your business. It is a strategy without limitations whether you run a startup or an empire of subsidiary corporations.
We may all define the word “project” differently. But only by achieving predictable cost controls can we lure investors, predict resource allocations, and prepare for long-term growth. Here’s how controlling project cost works in your favour:
Each business and client is unique. Whether you are offering a product or service to your current and potential clients you will need a predictive method for calculating resource allocation.
Fluctuations in workload can be deadly for any company. In lean times you may be paying staff to wait for orders to come in.
In busy times if you don’t have enough staff your orders won’t get filled. This leads to poor customer service, long wait times, and loss of clients.
Using project cost tools allows you to track history of similar projects and predict the resources you need. Even if 95% of businesses say a virtual or contingent workforce is essential to their success, you need to be able to know when to deploy resources.
Knowing your costs leads to a deep understanding of the resources required for each project.
In the digital marketplace, companies need to focus on building their brand. More than ever it is easy to do an online search and find comparable goods and services for a lower price.
This competitive edge in the market requires companies to stay focused on their costs. Project cost controls lead to overall cost controls across the company.
It’s impossible to build your brand and bring in new business without an intimate understanding of your costs. By focusing on cost you can offer the best value to new clients and build your brand accordingly.
Without a handle on cost, it is impossible to find places to become more efficient. The market has numerous examples of bulk purchases, technology changes, and economies of scale that can create cost control measures.
Your competition will be trying to eat away at your market share. If you and your employees aren’t developing new ways to save your clients money you are in danger of losing business.
Capturing the real time data of the overhead, support, products, and services required to deploy your consumer solutions allows for driving efficiencies.
Any manager or executive who has tried to manage profit and loss knows that the process of defining project cost can be a moving target. As your business grows the demands of overhead and management expense fluctuate accordingly.
This expense isn’t always a straight line, unfortunately. As the product line or service grows you may find moments where a larger investment in talent, processes, and technology is required to keep up with demand.
Knowing where this allocation is headed will help your company position itself for growth. Without a grasp of the project cost required there is almost no way to calculate the management structure required, without guessing.
Did you know that 80% of your customers will be responsible for the success of your business? Your company may choose to focus on individual clients and cost centers or projects and reward those core business relationships.
Keeping an eye on cost allows your business to reward client loyalty and stay flexible in the marketplace. You can make business development and marketing decisions on the fly around pricing and keep your clients coming back for more.
Project cost isn’t just real time data used to calculate the success of a specific endeavor and its relationship to your business as a whole. When you have an understanding of the elements of your cost structure your employees can become innovators in the field.
Some of the greatest advancements in the marketplace over the past 100 years have included innovations in deploying service and products. Only through an understanding of costs and customers can a company like Amazon develop predictive shipping as a successful business strategy.
With the proper project cost tools and applications to experiment with outcomes, your employees and stakeholders can create innovations in your service and product platform.
These innovations are typically deployed at the project level and lead to enterprise changes.
You and your employees need more than the essentials of project management to successfully service your clients. Only by tying costs to performance can you begin to move from an estimate to a definite goal.
With the right project management, support front line managers, as well as executives, can create changes on the fly.
Without this support, you are risking a profit loss on any given project that is left to chance. These mistakes are often the cracks in the foundation of companies who struggle.
The great news about controlling costs on projects is that these savings can drop to the bottom line. Or, in the case of exponential business growth, your company will have the resources available to invest in the success of your business.
Whether you are seeking venture capital or private credit to assist in your growth project cost data can show investors the quality data you use in daily operations.
Expanding daily information and project based information into quarterly and multi-year trends can be accomplished with the right tools to capture expense and overall costs.
There is little doubt that the right project cost controls can lead to the overall success of your company. But those controls require tools that can provide data collection, analysis, and real time support.
We can help. Price&Cost offers the ultimate estimation and project management tool.
Learn more about the features of our software now.