The coronavirus pandemic has changed the world as we know it. While there are reasons to be hopeful that there will soon be a vaccine, there’s no avoiding the fact that there will be something of a COVID-19 hangover, especially when it comes to the economy. For businesses to manage the transition into the new normal smoothly, it may be necessary to cut their costs. Sometimes, cutting down on expenses can be as effective as growing your business. In this blog, we’re going to take a look at a few tried and tested tips that’ll cut your business costs, which will ultimately help your company to be more financially stable.
Review Your Expenses
To begin, take a look at where your company is currently spending money. It’s normal for companies to just acquire expense after expense, especially when they’ve been in operation for years. But are all these expenses still necessary? It’s unlikely. By taking a look at where your company is spending money, you might just find that you’re able to cut your costs significantly, with virtually no effort.
There’ll be other expenses that come to light that are a little more problematic. For instance, you might find that there are some expenses that you’d like to keep, but which in the post-Coronavirus climate, just can’t be justified. Those ones will be a little tougher.
Effective Marketing Tactics
You should be cutting your costs to reflect the new economic climate, but you should also endeavour to grow your business too. While you can take a defensive stance in some areas of your business operations, they are some areas where it’s not recommended. For instance, your marketing. This isn’t something that you should abandon, given how important it is to the growth of your company. So let’s not think about cutting our marketing. Instead, it’s best to look at ways to market your products and services more effectively. Oddly, some of the more expensive marketing tactics are the least effective; and some of the cheapest (even free) marketing tactics can be very effective indeed.
If you don’t know exactly what you should be doing with your marketing, look at hiring an outside expert. They’ll help you to invest your marketing money into the areas where it’ll make the biggest impact.
There have been benefits to the coronavirus pandemic. For instance, many companies have discovered that the office they’ve been renting, while of course having its uses, perhaps isn’t quite as important as it previously believed. If your employees have been working from home without too many problems, then perhaps it could become a long-term solution. You will still want to have an office, but you could downsize. In fact, you might find that just talking with your current landlord about the rent you’re paying for your office brings the costs down. Renters are in a strong position at the moment — could it be time to renegotiate your deal?
Your business has the potential to make money, sure, but there’s no avoiding the fact that you have to spend money to make money. But how much you have to spend is under your control, somewhat. There are always ways to reduce the necessary expenses, from your hardware to how you communicate and beyond. When it comes to your hardware (such as your computers, printers, and so on), look at buying refurbished products rather than new items — they work just the same but cost 30-40% cheaper. If you’re still using traditional landlines for your calls, then learn more about sip trunking, and make the switch. It can lead to significant savings, without any reduction in service – indeed, call quality will be better.
You may also want to look at your other contracts, such as your internet, to see if there’s a better deal available. Some companies overspend on their internet because they always choose the fastest option available, but that may not be necessary for your needs.
Talk With Your Suppliers
Now is also the time to talk with your suppliers, and see if it’s possible to get a better deal on their services. You will have agreed your deals in a different climate. While you may be locked in to those deals, your suppliers may also be sympathetic to the situation you find yourself in, and be willing to reduce your bill. Of course, if you’re not locked into a contract, then you’ll be in a much stronger position. At that point you’ll be able to simply look around and see who’s offering a better price, which will usually prompt your current supplier to reduce their cost anyway.
Stop the Hiring Cycle
There’s one mistake that many companies make, and that’s that they spend far too much money on hiring employees. One of the best ways to cut costs is to retain your employees. It costs a lot of money to advertise a position, hire a new member of staff, and then train them up. And then there’s the whole matter of lost productivity. Once you’ve hired someone, work hard to keep them on board. Sometimes it’s worthwhile giving them a little more money, because of the savings that it brings compared to hiring a new employee.
Outsourcing and Improving Productivity
Another way to cut company costs is to outsource certain tasks. You may be able to do things in-house, but if you or your team aren’t specifically qualified to do that task, then it’s probably not a good idea. For example, let’s think about, say, your accounting. You could handle this task yourself, but it’ll distract you from other tasks that you could be doing that would push your business forward — it’s a misuse of your talents, essentially. By outsourcing the task to another company, you’ll be freeing up your time and getting access to expert help. It’ll also give your productivity a boost. It’s not always about cutting costs in a direct way; sometimes, it’s about making sure that you work as efficiently as possible.