It is a tough time to be in business. The economy is in a downwards slide, thousands of people have lost their jobs, and many small businesses are struggling. To survive through the pandemic, you need to adapt quickly and make smart decisions to reduce costs and maintain cash flow. To help you in this endeavor, here are five ways you can dramatically reduce your overheads.
Reconsider your Rent
Lease fees are generally the heftiest overhead for any small business. The craziness of 2020 most likely has your employees working from home, with your empty office merely gathering dust. Now is the perfect time to review the workspace and see if it’s time to approach it differently.
Could remote work be a long term solution for your staff? Should you investigate serviced office solutions in your neighborhood to reduce your monthly outgoings dramatically? Many people are predicting that the COVID-19 pandemic will transform the way we work, and paying significant overheads for office space may well be an expense that you can eliminate.
Look at your Advertising ROI
Tracking the results of your advertising spend is always a smart move, but in the current climate, it is more important than ever. Do you measure the success of your advertising campaigns? Whether you are reviewing digital metrics or using surveys to find out how new customers heard about you, tracking new leads helps you determine how to spend smarter on marketing and advertising.
If you spend $5,000 but make $30,000 profit, then it is most likely a sound investment. However, if you are investing $5,000 without a significant increase in profit, it’s time to reconsider your tactics.
Learn to do Your Own Books
To stave off boredom and frustration while finding positives in an otherwise tricky situation, many people are taking up new hobbies or studying online. Why not enroll in an online accounting course? This will simultaneously help you reduce your bookkeeping costs and increase your skill-set, making it a powerful win-win.
Switch to a Cloud-Based Phone System
The cloud can be useful for much more than file storage. VoIP, or Voice over Internet Protocol, allows you to ditch the old and outdated traditional business phone lines in favor of channeling your communications and multimedia sessions through the internet.
In addition to getting up-to-speed with the latest tech advances, you will save a significant amount of money in maintenance and telephone line costs. VoIP also allows for straightforward remote work options. Workers can dial in from anywhere and access the same functionality they would have in the office.
Get Creative with Staffing
In many small businesses, the people you employ feel like part of your family. The last decision you want to make is to let people go. However, in tough economic times, you may be forced to consider this option.
Rather than cutting staff completely, you may be able to offer part-time work, unpaid leave, or job-sharing options until your books are back in the black. If you can find a way to support your staff and keep them on board, you will most likely find they repay you with hard work and loyalty.
By being proactive and reducing your overheads now, you could avoid finding yourself in serious trouble in six months. Nobody knows how long the economy will take to recover, so it is critical to assess your income vs. your expenses and put in place a plan to survive.