Finding Savings in Operations
“Watch the costs, and the profits will take care of themselves,” so said Andrew Carnegie, 19th century American steel magnate and builder of numerous public libraries. His advice is as applicable to attractions as it is to steel mills. Here are some cost-saving ideas to put Carnegie’s words into action:
Manage Expenses Diligently
To find savings in any business, expenses need to be consistently tracked, examined, and reduced wherever possible. The reason? “You have to understand your historic costs before planning for the future,” says Christopher Lythgo, CPA and vice president of business development at BDC Advisory Services (as referenced in BDC’s article, “7 tips for reducing expenses in your business”). “This requires gathering data in an effective and efficient way.”
Cut 10% of Costs
Imagine what a boon it would be to cut costs across various departments without causing major disruptions or staff upsets.
“Most departments can cut up to 10% of costs without changing their interactions with the rest of the organization,” say the authors of Harvard Business Review’s (HBR) “When You’ve Got to Cut Costs—Now.” Such painless costs can be found by combining traditionally separate training days and celebrations into single events and staging multiple departments’ events at the same time to save costs.
Compare Rates Against the Industry
Different businesses pay different rates for goods and services, depending on who they are, how much they buy, and from whom they are buying. So compile costs, and then talk to other attractions companies to see who’s getting the best price breaks and why.
“If you see you’re spending more in certain categories, then drill down, investigate why, and take appropriate action to reduce those costs to industry norms,” says Lythgo.
Eliminate Noncritical Expenses
Search accounts for corporate memberships and other noncritical expenses that are not providing any real benefit to the company and cut them. The rule of thumb: If they are not vital to operations and don’t help make money, they should go.
Dig into Miscellaneous Spending
The HBR reports that each department at an unnamed company was allowed $10,000 a year to spend on stationery and supplies without question, while its manufacturing department couldn’t get management approval to buy a much-needed overhead crane that cost $8,000. But things changed: “Soon, a new crane appeared in the factory with its name painted on the side: Stationery & Supplies,” says the HBR article. “Its spiritual cousin—a riding lawn mower named Typewriter—was found in the maintenance department.”
Seek Technological Solutions
It makes economic sense to implement technological solutions that can reduce the number of people required to run an attraction. This includes moving to self-serve payment kiosks at gates, rides, and retail locations wherever possible.
Such savings can also be found in administration. “For example, many companies are now using cloud computing systems as opposed to in-house hardware that can be relatively expensive to buy and maintain,” Lythgo says.
Look for Lower-Cost Vendors
To reduce expenses in areas such as office supplies, “Look outside your pool of traditional vendors,” advises Royale Scuderi, author of American Express article “10 Simple Ways to Cut Business Costs.” “You can find affordable office supplies with large discount suppliers like Amazon Business, Walmart, and Uline, who can often beat traditional office supply prices.”
Additionally, cut back on consumables such as paper and file folders. This is the digital age: There is no need to print every electronic document and file it.
Move Marketing to Digital Media
TV, radio, and print advertising are expensive, while social media platforms are not. “Increase social media use and reduce traditional marketing,” Scuderi writes. “Consider capturing new leads with valuable content related to your business on platforms like Instagram, Facebook, Twitter, or YouTube.”
Reduce Lighting Use
Do the lights need to stay on during sunny days and off-work hours? In most cases, no. In others, turning off half the lights during sunny days can provide sufficient illumination while cutting energy costs.
Rotate Staff to Manage Shortages
With staffing shortages still present in the industry, start rotating which rides and sites are open and closed. Slow times of the day may not need to see everything open. Making sure that everything is open at least some of the time will still satisfy guests—as long as they are reasonably informed about the hours.