Running a business can be a rewarding, yet challenging experience. One of the biggest concerns for any business owner is keeping the overheads and costs as low as possible. This is especially true in this current economy that we find ourselves in.
With the global spread of COVID-19, businesses all over the world are finding it even more challenging to keep their doors open, and profits coming in with the restrictions, lockdowns, and stay-at-home orders imposed on them. Not only have staffing functions been drastically reduced, impacting production and operations, but customer spend has dropped drastically, especially with tourism and travel being highly restricted.
Effective Ways to Slash Business Costs
So, what can you do to keep your company afloat during these times? We took a look at some of the most effective ways that companies globally have managed to keep their company running and their books balanced. Here are some of our top tips.
1Re-Evaluate Your Insurance Costs
We can all agree that insurance is most certainly a grudge purchase, but in saying that, it is a vital cost to your company. Insurers claim that the first thing individuals and companies do when facing financially tight times is cancel their policies.
But it is highly recommended to re-consider canceling your policies entirely during a financial crunch. A total cancelation, should something go wrong, will put your company at higher risk, and you could face losing even more due to payouts.
It is wiser to revisit your insurance policies, pinpoint where you might be overpaying, consolidate them, and request new quotations on your business. In many cases with companies going through difficult times, you will find yourself reducing assets, relocating, or even cutting down staff.
Your staff might, especially during COVID-19 times, be working more from home, which will entitle you to a lower workers comp insurance cost. So, spend some time with your insurer figuring out what you can cut, or look out for companies that can re-quote you a lower figure.
2Reduce Your Office Space
COVID-19 forced millions of companies around the world to drastically change their working and staff policies, and what was expected to only last a few weeks has become the new norm. Before the pandemic, only 17% of the US workforce were remote workers, and this jumped up to over 44% during and after the pandemic. Businesses globally have had to pivot their operations to ensure that employees can still be productive from the comfort of their own homes.
But with this, comes the wastage of physical assets and office space. There are various options for you to consider when it comes to office space.
If you do need an office open for skeleton staff, or for staff working flexible time, consider moving to a smaller office space with less equipment and overhead costs. You can opt to rotate your staff working from the office during the week, offering two days working from home, and three days in the office.
Secondly, you can consider shared working spaces, which are growing significantly in popularity. These are smart office spaces that usually come equipped with all the necessary equipment and elements you need to run your business successfully. You can opt for a space that is serviced, includes boardrooms, and offers time-out zones for your employees to take a break during work.
Lastly, you can consider relocating your office entirely. Remember, it is all about location, and office space closer and in the city centers are usually on the higher side than those further out. It could be worth your while to weigh up your options when it comes to office rentals. That being said, with so many companies moving to more remote work, or going out of business completely, you could be able to re-negotiate your rent to be more in line with the current property rates.
3Modernize Your Marketing Strategies
Advertising and marketing can take up to 12% of the overall budget, with more being allocated in the B2C environment than B2B. But these costs can be drastically slashed by moving your marketing online. With the evolution of digital capabilities, marketing can be shifted to pure online methods, which will help you continue to reach your targeted audiences.
The first thing you need to do is to build up your email database. Regular emails are one of the most effective ways of generating business for your company, especially if you have a functioning website. Special offers, promotions, new product announcements, and educational content can be conveyed through these emails.
Make use of social media. Facebook and Instagram accounts have become necessities to any business running globally. Not only do customers research the validity of businesses on social media, but many actually find products and services they are searching for on social platforms.
Finally, make use of paid ads with Google. In many cases, you can set your budget to what you can afford, create your ad, and be seen by targeted audiences who will be likely to convert to customers.
4Upgrade Your Technology
This may seem like a contradiction but stick with us. By upgrading some of your technology in your business, you can do away with outdated, redundant technology and equipment that is no longer serving your company.
Most modern technology offers an upgrade in offerings and operations and will allow your staff to streamline their processes, combine several functions into one process and even do away entirely with time-consuming operations.
In many cases, it will also allow you to go paperless, which is a huge cost-saver to your company as you can conduct business digitally. This will tie in with your employees working remotely too. Cloud enablement and digital advancements mean that you can engage with customers and employees in real-time and effortlessly. Advancements like AI, automation, and machine learning allow your processes to be significantly reduced and operations streamlined, meaning fewer costs for you in the long run.
5Take Things Online
Millions of companies all over the world have been forced to go entirely digital due to COVID. The pandemic led to an unforeseen surge in eCommerce sales and has significantly accelerated the industry for several years.
Retailers and smaller brick and mortar stores, as well as restaurants, have received huge hits during the pandemic, with millions being forced to shut their doors. eCommerce and e-tailing, however, have provided an alternative solution to allow these businesses to pivot and take their businesses online.
There are numerous options for you to consider if you are looking to keep your brand alive. You can opt to sell your products on platforms like Amazon. Amazon offers a solution for small businesses to list products and manage the fulfillment processes for you. You will just need to ensure that your products stick out in the millions of listed products.
You can also choose to launch a brand new eCommerce brand from scratch. From building your website to establishing your social platforms and choosing your fulfillment options, re-launching your business online can be challenging, but can end up being hugely successful. Especially in this digital age.
To wrap things up, COVID-19 has had a significant impact on millions of businesses worldwide, and business owners have scrambled to find ways to slash costs in the company. From going online, to cutting down unnecessary expenses, there are dozens of ways to keep your company afloat.