One of the most significant issues facing anyone running a business at present is where they can effectively save money on their daily running costs. The current pandemic climate has forced many businesses into very tight financial corners. Unfortunately, one of the main ways to reduce expenditure is to let employees go from the workforce. However, this has a huge, negative knock-on effect for many people.
Therefore, business owners must remain alert to ways in which they can reduce overheads without causing lasting damage. Below we outline some of the main things to consider. But it’s also worth pointing out that there are indirect ways of reducing and avoiding potential costs, such as tightening online security and being aware of growing problems like forex trading scams if you invest capital online.
Here are some of the main ways in which many business owners can start to cut back on expenditure without needing to let anyone go unnecessarily.
Be smart about how you use your team
Instead of sacking staff outright, one of the best things business owners should do is consider ways in which they can make their wage payments go further. That might mean switching to a rota or roster system, for example, where they merely employ staff as and when they need to – cutting down on costs each day.
It may also be a question of whether or not you could offer to move some employees from full-time rosters to part-time work instead. Rather than remove workers outright, it might be prudent to discuss options with your team. It is a good move to have open conversations with your staff over who is likely to benefit from part-time hours the most, for example, before moving them wholesale over to fewer hours.
Reach out to your team
One of the best things you can do as a modern, approachable business owner and boss is to canvass your team and workforce. Establish with them that you need to start driving down costs and that you are looking for innovations and ideas. As your team works hard on the frontline of your business each day, it’s not unreasonable to assume that they will have efficient, cost-saving theories that may be worth exploring further.
This is also an excellent way to keep your team on-side. A business owner who cuts staff before a consultation is unlikely to receive the same respect and support from one who will ask their employees for their opinions beforehand. That way, you can ensure that you continue weathering times of economic difficulty without employee unease in the meantime. Reaching out for help from any quarter is not a crime!
Check your energy use
It may surprise you how much your energy bills are driving up your business costs. While this will largely depend on the type of business you are running, and the industry you are in, consider keeping an eye on your electricity usage. What about heating and cooling? Are there more efficient options for you to power and warm up your business?
As businesses need to run on power throughout the day, overhead costs are always likely to be high. Make sure that your premises are set to a plan that gives you the best value in rates from your supplier. If all else fails, consider switching – and it may be worth looking for greener alternatives, too.
Before you start reconsidering employee contracts, you must make sure you fine-tune your supplier agreements. All good business owners need to review the supplier list in times of heavy cost-cutting. Consider which suppliers are crucial to your business. Talk to those suppliers and see if there is a win-win way that forward. Remember, it is in their interest to ensure that you can continue to trade. Obviously if suppliers are not essential, it may be time to cut contracts.
More so, consider renegotiating contracts whenever possible. There is no need to do this under any false pretence. Lay things out openly and honestly – establish that while you are keen to continue working with a supplier, you are looking for new routes for negotiation. In times like these, you may find more than a few suppliers and firms willing to meet you half-way.
Look at short-term survival
Having a long-term plan is just good practice. However, in times of crisis, you must think about short-term survival. As all good small businesses do, it is a matter of learning how to ‘pivot’– how to make sure that you have a different way to manoeuvre your business if you need to start cutting costs.
Therefore, don’t just stick to the long-term dream. Think about ways that your business can weather the weeks and months ahead, particularly given the global uncertainty – and make sure to take plenty of deep breaths. Reach out to your team – and you’ll find a way to break through without letting anyone down.