As the effects of the COVID-19 pandemic continue to play out in the economy, many business owners are still facing an uncertain future. Combined with the hit they have taken over the last few months and the predictions of a continued struggle in the economy, companies of all sizes are looking for ways to take more control of their finances. Every penny counts during a recession, and as hard as it is, cutting business costs is an important part of surviving an economic downturn.
There are some things to think about as you plan to reduce expenses over the next few months.
Consider Relocating
Leasing office space or warehouse space is often the most practical investment for small business owners, but when financial hardship looms on the horizon, the most practical investment could be in remote employment opportunities or relocation. Chance are your leasing fee won’t go down because of the recession, and you can use the relocation as a way to lower your operating expenses. Your property owner may want to keep you and will renegotiate your rent, but don’t be afraid to look at what is out there.
There is also the idea of remote employment. Many companies have found that sending their employees home during the pandemic has been an effective way to cut costs without sacrificing customer service or productivity. If you are worried that your team won’t be able to handle the transition home and inadvertently damage the consumer experience, partnering with a company like Voicenation can provide peace of mind that each customer will be heard and helped without delay. Either way you go, there is still a huge potential for cutting experiences significantly.
Get Rid of Extras
There may be a lot of extras in the budget that could be trimmed in order to save money. While you may consider them work perks, they may not be needed and in an effort to pinch pennies, you can do away with the office lunches every Friday or stopping the coffee runs. These are minor inconveniences, but it could add up to hundreds of dollars a month. Don’t overstock the supply cabinet or carry everyone’s favorite flavor of creamer or style of pen.
You may also be paying for warehouse space that you don’t really need. Try to consolidate your inventory or sell off excess items quickly to money on storage fees. If you have extra space on your business property, you could try to rent it out to another small business in order to bring in some extra money.
Invest in Peer Teaching
As technology and processes continue to change, you might be spending thousands each year on training and professional development seminars. Instead of sending a whole department to these meetings, send one of the best team members to the training and allow them to come back and train the rest. You could also break it down to where the senior staff trains two people, who each train one person, and on down the line.
You can use web conferencing or online resources to keep your staff in the know, but you can also develop a mentoring or job shadowing program to give those who need more hands-on training time to learn. By using peers to teach their coworkers, you can save a lot of money.
Rely on Scalable Technology
During a recession, you may experience fluctuation in staffing numbers. If your business has dropped off, you may need to let people go but others may leave to find better wages or employment due to their own finanical situation. As recessions happen, you may find that you don’t need quite as many company cell phones or laptops. You may be able to consolidate your printing and copying needs to just one high-tech machine.
You may want to consider moving to a third-party IT management company that makes use of the cloud. Scalable technology lets you save money when you need to but gives you the freedom to build back up once things pick up.
By changing your approach to operations during a recession, you will see that you save money in just about every expense item in your budget. You can save on labor costs, office supplies, electricity, human resources, and much more by paying attention to these areas.
