ways of decreasing costs
Introduction
Increasing sales in any business today has become a critical business priority. However, once sales decline, small and large organizations are forced to look for ways of decreasing costs. For AirBnB, reducing costs is one of the business’s key marketing strategies. Amid the growing market unpredictability rate, here are some helpful insights, tips, and tools that will effectively simplify the process.
Streamlines Management For any business to succeed, it has to manage what it has appropriately. A laissez-faire approach to doing business can no longer get AirBnB to the place it wants to be ten years from now. The company needs to pay close attention to factors such as seeking outside assistance or partnerships to reduce costs on services.
AirBnB’s finance officers should consider incorporating outside help, possibly in rental properties from an unbiased, professional organization. This will give the company a fresh perspective and the ability to settle or reduce unnecessary expenses on rental homes. Most importantly, partnerships with a professional firm will make sure the organization remains honest and accountable in its financial operations.
- Encouraging Customers To Lease Out Properties
If you have got the money, making purchases instead of leasing is the preferred option. By buying a costly type of equipment or real estate property, you take full ownership of it and not incur any future costs. However, when you are concerned about reducing costs, leasing is highly advisable. By encouraging its customers to lease out their properties or empty rooms, they lessen the hefty sum of money spent on assets that might prove difficult to ‘offload’ late on. What’s more, through proper lease bookings, AirBnB will go on to boost its cash flows and cancel the commission agreement if it feels it has gone against company standards.
- Tightening Inventory Processes
Airbnb should identify the systems and processes dictating how the company manages inventories. To do so, it should concentrate on the procurement and service delivery needs closely associated with demand. To effectively reduce costs, the management team needs to keep in mind the importance of rendering services right when the clients need them. It lowers service costs and limits the amount of time required in setting up booking services. For instance, reducing booking costs on touring services and leisure retreats during holiday seasons will increase the number of customers searching for cheap booking services and rental homes.
- Better Delivery of Services Through ‘Clever’ Payment systems
Airbnb also needs to create an environment of fast or prompt payments from clients. The company can do this by offering discounts on incentives. Although it will tighten profit margins, eventually, it will free up some cash for the business. Lastly, the company should review how often it delivers services to customers. Clients who are worried about cashflows will opt for making frequent and small purchases rather than large ones. Therefore, the company should avoid delivering the same booking services three to five times a week and encourage clients to make long booking orders, especially on ‘special’ leisure facilities.
Conclusion
For any organization, the need to reduce costs is not an inconvenient or short-term business intervention. Instead, it is a prudent long-term company-oriented strategy. For Airbnb, the more it reduces costs on services, the more competitive it is in the online marketplace.