Cost Management

1. understand that with contractors you are paying for them - their costs - upfront , and that with permanent staff you are paying for them down the line . Contract staff are actually , when you do the maths , comparable with permanent staff . They are a very useful resource .
2. be conscious of where all your costs occur . People often forget that a business premises costs money that must be factored in , likewise slack periods , leave etc. . Further , with a contractor , their rate factors in their subsistence - accomodation and food , and their transport costs . It is far better to have as many people as possible working from home - this saves the business massively in costs both directly and indirectly .
3. it's important that costs are fairly tightly controlled but if they are controlled too tightly then it can be counter productive . As such it is important to deal with the big picture and to deal with categories rather than line amounts . Dealing with categories allows the expenditure to be monitored and managed - eg. what airlines & flights do we use ? what hotels do we use ? what costs do we cover ? are our costs too big ? - if so - why ?
4. spend money upfront to save money down the line . If a project is designed and developed properly at it's first release it will save massive amounts of downstream costs - customer and developer support , bug fixing , update costs etc. .
5. very important - think things out - do things intelligently . It's amazing how much money is wasted by people and companies not doing this .
6. company structures - it's very important to bias the company towards the productive side and away from the overhead and managment side . This is basically a judicial placement and an intelligent usage of personnel . You might need , for example , just a Managing Director . You may not need a full time Personnel Manager - so use a part time Personnel Manager . Likewise with the Financial Director . Where possible multiuse the staff . With project management place a business manager above - effectively supporting of - the technical project managers .
7. contractors - a good contractor is very versatile - they don't need to be 100% skilled up on your platform but they need to be able to learn quickly . Expect the contractor to hit the ground running but expect that it will take a short while ( a few hours ) before they come up to stream . Some intelligent thinking goes a long way in getting on stream quickly .
8. consultants - careful with consultants . If they are telling you something that you should already know then you need to learn that in the first place . If they are bringing on board technical skills and insights that you don't have then they effectively become a supplier . Ensure that the quality of your personnel is maximised before bringing in a consultant . When bringing in a consultant think about - 1) what you expect - what you want to gain , 2) where the consultant is coming from - can they provide you with what you are looking for ? It has to be a managed process on your part and the consultant must be very much in the picture - he \ she must know exactly what you want to achieve and how you want to achieve it .