Sam Makad is a business consultant. He helps small & medium enterprises to grow their businesses and overall ROI. You can follow Sam on Twitter, Facebook, and Linkedin.
Many business owners are still bracing for a difficult time due to slow sales and new government restrictions. Learn how to cut costs and make it through stronger than ever in this pandemic.
The recent COVID-19 pandemic has affected businesses across the globe in a variety of different ways. From a reduction in sales to severe impacts on employee wellbeing, everyone has taken unique steps to get through the process as smoothly as possible without closing down their business altogether.
Even the largest of companies have had to take precautions during this time, with one of them being trying to reduce their overall expenses.
In this article, we are going to talk about the different areas where you might be able to reduce business costs and how you can do it. While the final outcome will be different for every business depending on their size and structure, most of these ways will still be able to save you money.
Let’s get started!
If your company produces its own products or makes them for others, then it will obviously have a higher production cost compared to somewhere that buys its goods from a wholesaler. While you might already have a plan to make your items as cost-effectively as possible, it can be wise to revisit your expenses during the current pandemic.
Try asking yourself questions, such as “Are their cheaper materials that I could use?” or “Should I discontinue a certain product as it has a higher manufacturing cost?”. Even just saving an extra hundred dollars a month can make a huge difference in your budget.
While you don’t want to completely cut out all of your advertising during the pandemic, it is important to rethink your marketing plan. What might have been working for your business previously isn’t going to work now that there are so many changes.
Rather than focusing on print, try and look at online advertising since many people are working from home or on lockdown. It’s a much cheaper alternative and can reach thousands of potential customers in an instant.
Since many sales are now being done online, a good delivery service is a necessity for most businesses. However, they can be expensive, especially if you are covering the costs. This is why you want to find a way to do it as most affordably as possible.
You might look at finding yourself a different delivery company altogether, such as Cincinnati Couriers. You would be surprised at how much cheaper it could be by comparing different prices.
One of the enormous costs for many businesses is their utility bill, and during the recent pandemic, not all of us can afford the astronomical water and electricity rates. Luckily there are many ways you can reduce these costs, and most of them are quite straightforward.
Firstly, try only using your water and power when you need it rather than running it excessively throughout the day. Simple things like switching off the lights and power points can make quite a difference, even though you might not realize it.
For a long-term solution, you might also think about getting solar power, LED lightbulbs, water tanks, and low flow faucets installed throughout your business. They can certainly be worth the investment, especially if your company resides in a large building.
Another one of the biggest costs for a business is, of course, their staff, and while you might need to make changes, you shouldn’t go letting anyone go until the very last minute. Instead, try and find other ways to manage your employees without ripping them of their income.
You might look at offering flexible hours, work from home options, or allow people to switch their shifts with their co-workers. Not only will this save you money, but you can improve your employee’s wellbeing at the same time.
For businesses that have just started up, the last thing you want is to be even more in debt due to the current crisis. While you should still try and sort out your repayments every month, you might consider talking with your lender about alternate solutions.
Some banks and companies might wave certain fees for late payments, or even give businesses a little more time to sort out their finances. That little bit of extra money each month can make a big difference and help you continue managing everything during the pandemic.
7. Store Hours
Since many countries have now been placed on lockdown, you may find that your store doesn’t need to be open from 9-5. Instead of letting staff go, one thing that you may consider is reducing your store hours or closing during certain days. This way, you are not wasting money and resources by being open when nobody is visiting your store.
Another idea for more extreme cases is to consider trading solely online. E-Commerce is more critical now than ever and is still a great way to sell your products without the costs associated with a store. If you haven’t set up a website yet, try doing some research online, or hire a freelancer to build a page for you.
Partnerships have been used as a way to cut costs for generations and can be an excellent idea for both parties during the recent pandemic. Not only do you both get a chance to release new products, but you can design something that is in high demand during this time. For example, face masks, tissues, and hand sanitizer.
Both companies get to reap the benefits and can enjoy the advertisements they gain from one another. While this isn’t exactly a technique to “save money,” it is a way to keep your business booming without spending a fortune.
By following the guide above, you should be able to start making smart changes to reduce some of the expenses of your business. However, it is important to remember to prioritize these different changes, as some of them may not need to be done until the very last minute. For example, you wouldn’t want to fire all of your staff before trying to cut on other areas first.
“Success in business requires training, discipline, and hard work.”
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