Maintaining cost control has always been an important factor in business. However, today’s world of the COVID-19 pandemic has called for creative, cost-effective ways to maximize every dollar to help keep business afloat until the worst has passed.
So how do you do maximize every dollar? 11 professionals share their advice and methods on how to cut business expenses in the wake of COVID-19.
Don’t Go Straight to Layoffs
No one wants to lay people off from their company. If your budget calls for layoffs and you don’t do it, there may not be a business left for anyone to work in anyway. Before making big personnel cuts, review all the company perks and benefits and look carefully at what could be temporarily suspended.
Vanessa Molica, The Lash Professional
Reduce Overhead Office Expenses
If you are working remotely by choice or because of the effects of COVID-19, doing so is actually a great way to cut overhead costs on office spaces. Companies can be extremely productive without ever having to meet in an expensive conference room. If working in an office is vital to your company’s success, negotiate with your landlord on better lease terms or downsize your office space.
John Yardley, Threads
Invest in Quality
Instead of paying for several different “cheap” software that you don’t use to full capacity, invest your money in a single software system to manage your entire operation. Do your research to find software that will aid your company in being as productive as it can be. This will simplify your process as well as cut down on unneeded business expenses.
Megan Chiamos, 365 Cannabis
Where Can You Make Cuts?
Review your list of monthly subscriptions and then start asking questions. Can you cut it completely? Is there a cheaper alternative? Can you negotiate with the provider? Saving on these renewal costs is one of the fastest ways to improve cash flow.
RJ Weiss, The Ways to Wealth
Renegotiate Everything
As the economy goes downward, your buying power increases, even if your business is experiencing a temporary setback. The worse things become, the more you should negotiate discounts for just about anything from your suppliers. Don't be afraid to ask for discounts or additional services for most of your regular expenses and you'll be surprised by how many are willing to work with you. If they say no, don't be afraid to threaten to cancel and go to a competitor. Businesses don't hesitate to raise their prices on you so you shouldn't be hesitant to ask for a discount when you can!
Adam Sanders, Successful Release
Not Everything Has to Be New
In today’s society, there is an underlying need to get the newest equipment and the best of everything, but it adds up. Monitors, cables and desks are just a few of the office supplies that can be bought second hand. Also, having days where employees work remote allows facility costs to be lightened.
Alexes Jones, Law Firm SEO Company
Go Price Shopping
Although office supplies seem small in the grand scheme of business, those costs add up. Don't be afraid to stray from your traditional vendors and go price shopping. You may be able to find cheaper prices by negotiating or turning to a big retailer like Amazon or Walmart. You can also sell leftover supplies like cardboard and paper rather than recycling them. If you have equipment that mostly goes unused, consider renting it to other businesses.
Sam Hawrylack, How To FIRE
Invest in Cross-Training Employees
Cross-train your employees to perform more than one role. It’s a win/win situation because your workforce gains new skills and experience to take with them, and often the company will need to hire fewer employees to cover additional areas. Cross-training has huge cost benefits and potential.
Deborah Bubis, CareerAve
Ditch the Petty Cash Spending
One of the lesser-known, yet potentially effective ways to cut business expenses, is to take a look at your miscellaneous or petty cash spending. By definition, this is generally the little stuff, but it's also a category that tends to see little to no oversight. If you keep a petty cash log, go through it for the last month and see what items didn't need to be purchased. Or maybe you reference recent business credit card statements to see what fat could have or should have been cut. If you've never done this exercise before, the results can be rather enlightening.
David Walter, Electrician Mentor
Have an Emergency-Brake Plan
Create an emergency-brake plan for expenses and people cuts before you need it. For example, if you have written and agreed that when your revenue drops by 20%, you’ll make specific cuts to overhead (and you’ve outlined those cuts) along with who you'll lay off. Do the same thing at 30%, 50% and 70% reduction in revenue.
Jonathan Slain, Recession.com
Transition to Online Work
One of the best ways to cut business expenses is to go virtual. A lot of people rely on traditional means for documents, meeting notes and so more when it would be more effective and cheaper to use a computer or work online. This will save a lot of money, be more organized and easier to find than having a lot of physical files.
Andrew Roderick, Credit Repair