Property can contribute to a much rosier P & L statement

Keeping costs to a minimum has always been a central business strategy, but with businesses cutting expenditure to the quick, it is very challenging to find new ways to trim costs further.

I have long held the belief, and in fact the evidence too, that smarter property leasing strategies can offer unexpected opportunities to cut costs. And the results can be immediate.

Inevitably, people and property are the biggest costs for a business.

When times get tough, and profits dwindle, most business managers go straight to the people cost to see if it can be reduced.

But reducing staff levels does not immediately impact profit and loss. It can take some time, as people work out their notice, redundancies are calculated and paid, legal and HR costs are incurred.

I worked recently with a client who was bemoaning the time lag. He was forced to look at reducing costs and had looked immediately to staffing levels as a means to cut back. But that required spending more in the short term to gain a cost reduction in the medium term, with the break-even point over half a year later.

Now to contrast a strategy to reduce property costs. This strategy can have an immediate impact and any dollar saved in rental costs and conditions is immediately shaved off the bottom line. No time lags or delays.

It is just one of a number of reasons I think it really prudent to invest in a well thought through strategy for managing property leases.

Time and again, I have witnessed clients achieve savings sometimes ranging into the hundreds of thousands of dollars a year through working through the details and tailoring their property leases to closely meet their needs.