Companies of all sizes are bound to face financial challenges from time to time. There’s always a risk that something could happen in your industry that reduces the amount that people can spend on your product or services.
Alternatively, you might find yourself face-to-face with a competing company that steals a significant percentage of your business.
More often than not, when businesses fail, it’s because of an issue with their finances. That’s likely to be even more of a problem right now when things like COVID-19 are changing the way that we live and work on a drastic scale.
If you’re having a hard time overcoming growing expenses in this difficult time, don’t panic. There are a few ways you can cut costs and prepare your business for the future too. Here’s everything that you need to know.
1. Cancel Unnecessary Subscriptions
The first step is getting rid of the things you don’t want or need. Your company likely has many essential subscriptions for services like cloud communications, bookkeeping, cloud storage, and more. However, there are also software solutions that aren’t as necessary in your expenses list.
Start by going through your last month’s outgoing expenses from your business. If you pay for things on a bi-monthly basis, it may be worth checking a few statements at once.
List all of the items that you pay for that your company can’t do without. This should leave you with a handful of potential expenses that you can avoid.
For instance, allowing your team to use their own smartphones instead of business issued ones could make them more productive and save you money too.
Maybe you can also negotiate a better deal with providers if you don’t use or need particular services that come with your package.
2. Purchase Used/Refurbished Equipment
It’s not just software that makes running a business more expensive. Although modern companies often rely less on hardware than they used to, there are still some pieces of equipment that you can’t afford to overlook.
These items might include computers or laptops for your employees, phone systems, printers, and copiers, or even crucial assembly equipment.
Whether you’re investing in office furniture or cars for your fleet, it’s essential to keep costs as low as possible. Look into lightly used items that you can get for a discount.
You’d be surprised how much you can save on items that are practically as good as new, just because someone else has owned that product before you.
3. Experiment with Freelancers
Employees are some of the most valuable assets for any business, but they can also be extremely expensive to hire and manage. Hiring and maintaining a new staff member is more expensive than you’d think these days.
That’s particularly true if you’re looking for someone with a highly specialized set of skills or knowledge.
One excellent way to save yourself some time and money is to consider hiring freelancers for non-core work. Freelancers can operate outside of your business, so there’s no need for the extra expense of office space.
Another bonus of freelancers is that you only need to pay them for as long as you need them. There’s nothing that forces you to consider hiring for longer than necessary.
4. Encourage Remote Work
Speaking of new working styles, why not consider asking your permanent employees to work from home more often too?
Working remotely is number one on the list of must-have perks for many modern team members, which means that you may be able to attract more talent to your team just by offering flexible working opportunities.
Studies indicate that remote working practices positively impact employee job satisfaction, morale, and productivity.
At the same time, remote work leads to a variety of savings for your business, including reduced water and electricity usage, limited commuting and travel costs for employees, reduced time lost to commuting and travel, and so on.
Some employees even say that they would be willing to take a pay cut if it meant that they could work remotely, even some of the time.
5. Pool resources with other businesses
Not everyone in your industry is necessarily out to get your business. Sometimes, companies can work together to get more done.
For instance, depending on your company’s size and function, you can consider getting involved in a “buying group,” which allows you to access better terms and pricing than if you were purchasing services on your own.
You could also consider swapping your services for the services that other companies offer. This could save you a lot of time and money when it comes to getting the things you need to keep your company moving in the right direction.
Look into buying some resources in bulk along with some other businesses in your area that use the same materials like you to save on shipping costs and get a better deal or discount.
Or consider sourcing locally. This will not only raise your profile as a socially and environmentally conscious business but could also raise the quality of the products you sell.
Alternative options for pooling resources can include things like joining a trade association or small business network or getting involved with a local resource library or coworking space. There are even things like partner networks that allow you to save cash by using a specific kind of credit card.
Cut Costs Without Losing Resources
When dealing with a business crisis, it’s essential to make sure that you know how to cut costs without losing out on crucial resources. Every business is different when it comes to what they need to stay running smoothly.
Before you start looking for ways to reduce costs, make sure that you know what your company can’t do without.
The good news is that even if you have a lot of specialist requirements, there’s a good chance that you’ll still be able to find fat to trim in your budget.
About the Author:
Ashley Wilson is a digital nomad and writer for hire, specialized in business and tech topics. In her self-care time, she practices yoga via Youtube. She has been known to reference movies in casual conversation and enjoys trying out new food. You can get in touch with Ashley via Twitter.