In tough economic times, when small business owners are struggling to keep their heads above water, it makes sense to look at cutting costs to increase the chance of success.
Overhead expenses can take a significant chunk of revenue, and while it’s tempting to think that slashing one big expense, like staff, could be the overall solution, your most significant cost savings could come from making a series of smaller cuts and implementing innovative solutions.
The cost of paper and ink may seem insignificant, but it can add up to a big business expense over the course of a year. It’s a commonly recurring business cost that you can reduce by encouraging employees to be mindful of paper wastage and to stick to the following rules:
- Only print when necessary
- Reuse waste paper for notes instead of throwing it away
- Set all work computers to print double-sided by default
- Print documents in a smaller font, and file important documents on your computer instead of in a portable file.
Hire in furniture and buy refurbished equipment
Getting brand new office equipment and vehicles can be very costly. Reduce the expense by buying refurbished vehicles, computers and equipment. Look out for manufacturers that offer refurbished items at a discounted price, try auctions, or search for sales online.
Another option is to rent the office furniture you need from companies such as Teljoy, who offer items such as desks and ergonomic office chairs at affordable rental prices.
Reconsider traditional services
Getting stuck with a long-term contract for cleaning and maintenance can result in expensive monthly bills. A great potential for cost savings is to hire cleaners or handymen to only come in when you need them.
SweepSouth is an on-demand service that allows you to book pre-vetted, trustworthy cleaners and handymen - a convenient and cost-efficient alternative versus being tied into a contract. Browse their Connect app too, which caters specifically to the business owner. You can find services such as web developers, tax and accountancy services, graphic designers, social media and video marketing facilities.
Leverage social media advertising
Truth be told, traditional advertising is so expensive that many small businesses can’t afford it. Paid social media advertising is much cheaper and will provide a savings opportunity, but if even that is too much for you to afford right now, you can build your company’s social media following organically on Facebook, Instagram, LinkedIn, Twitter and YouTube.
It’s a much slower process, but it won’t cost you anything. You’ll also be able to authentically express your brand’s personality, and build trust with your audience. The only cost will be your time, and a firm commitment to regularly be active and proactive on the accounts you’ve created.
Use freelancers and contractors for non-core work
Contracting out the jobs in your company that don’t require full-time employees can help cut overhead costs. Freelancers and interns are useful for once-off projects and non-core activities, such as data entry or document processing.
Make sure though, that you have proper contracts in place to set expectations and mitigate risks, for both parties. Bear in mind that freelancers may not share the same loyalty and passion for your business as full-time employees. Because their time is money, they might prioritise higher paying jobs and projects over individual business needs, so it makes for sound business practice to balance your staff complement by hiring a combination of both full-time employees and freelancers.
Hang up on landlines
If you actually consider how often you or your employees use the landline, you’d be taken aback. Moving to a VoIP Telephone system is a no-brainer in terms of cost-cutting benefits.
There are so many great business VoIP services out there that will provide good quality and save you a significant amount of money - just do your research thoroughly and choose one that suits your business needs best.
Four-day work weeks
If your business is in troubled waters, it might be tempting to let staff go as a quick fix to cutting costs, but with that cost-cutting tactic goes valuable talent. Try to hold onto good staff (especially during a pandemic) by considering options such as introducing a four-and-a-half-day work week, which can save 10 percent of their payroll, while a four-day week saves 20 percent.
When doing so, explain that you’re trying to see the business through to better times and would like to save jobs versus culling them, and that everyone will need to work smarter to accomplish the same amount of work in less time.
If you choose to go this route, you may even find that some staff will happily volunteer to switch over to a four-day work week, such as employees who want to spend more time with their children or grandchildren, or employees who need time to focus on other interests.
Apart from having more time to themselves, another advantage is the money they will be saving on commuting to work, plus incurring additional expenses such as having to provide childcare for a work day. It’s also interesting to note that many companies have found that employees who work a four-day week are more productive, have greater focus on their projects and take less sick leave.
Cutting costs shouldn't just be a periodic exercise to improve your bottom line. Good business practice dictates that you should regularly evaluate all operational expenditure to see where you can trim unnecessary fat. This will not only help you to grow your bottom line and reduce the risk of cash-flow trouble in the future, but will also help you become a more efficient business overall.
Additional information supplied by Irvine Partners
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