We're living in an unprecedented time in which nothing is as simple as it was just a few months ago.
Because of lockdowns around the globe, some companies are finding times much tighter than ever, and that can put an onus on those in positions of power to make savings across the business to ensure that it's financially secure.
While there are many ways for a business to cut costs, not all of them are as forward-thinking and sensible as others. In this blog, we examine some ways that small businesses can save during the coronavirus crisis, as well as some other ways businesses should avoid.
Where businesses can save
It's important to look at the challenges presented by the pandemic as those needed to change your business for the better. This can help you to prioritize the changes you'll need to make savings.
Renegotiate with suppliers: Everyone understands that times are tough for businesses. If you're struggling and thinking that you might not be able to continue working with a supplier, consider talking to them and renegotiating. It's a much better idea to negotiate a lower price or a lower level of purchase rather than leaving that supplier altogether. This results in the supplier still getting your business, and you do so at a price you can afford.
Rethink your working space: Now's the time to think about where you work. For some businesses, a large office is a necessity, but for others it's actually not critical. You might find that working from home could become a more suitable long-term practice, and this could save you a significant amount of money. It could offer the possibility of a smaller office with staff coming to the workplace only on certain days.
Embrace the cloud: Now could be the time that your business embraces the cloud like never before. This can provide you with excellent savings with regard to the expenses of running your own physical servers, and the costs of IT infrastructure and staff to manage it.
Savings tactics to avoid
When businesses find themselves in a position where they're spending more money than they're making, there are no easy choices. The ideas set out above are some of the smartest ways to save, but it's also important to understand which parts of your business you need to avoid cutting out.
Often businesses make cuts to vital services, which make it even harder for them to recover.
Staff training: One area of the budget that you might think of cutting is staff training. After all, staff members are already good at their jobs, right? Training can feel like something that's done to enhance team members but isn’t really necessary. The truth is that staff training is vital, and never more so than during times of crisis, like now. Training and business coaching can actually be a huge help to guide your small business through these tough times. Now's the time to invest in upskilling staff or taking part in a CEO roundtable in which businesses assemble to discuss ideas.
Marketing: Another area that's often reduced or abandoned altogether when times are tight for a business is marketing. Over the course of the pandemic, it's been suggested that 72% of businesses have cut their marketing budgets. However, this is unwise—in a situation like this it's very unlikely that marketing is the problem for companies that have seen a drop in business. Getting rid of your marketing efforts will make the problem worse, as the business you're still getting will then dry up. It's a much better idea to refocus marketing tactics on the areas of the business that are working and make the savings elsewhere.
Trying to do everything yourself: Small businesses often utilize outsourced services in order to deal with a number of different tasks that require specialist skills. However, during the pandemic, some companies are choosing to end their connection with outsourced services such as cybersecurity, customer services, or IT support. Once again, it's important to think about whether doing so is actually a cost-saving activity for your company. Without your outsourced IT support services, you may save the monthly cost, but when you encounter a large problem and lack the skills to fix it, you may have to spend far more in order to deal with the issue.
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