There are times when business is good — and then there are times when it’s bad. Needless to say, 2020 has, by and large, consisted of the latter.
From quarantines and social distancing to a sputtering economy, there are plenty of reasons for businesses great and small to have struggled during the past year.
Larger businesses naturally have a much deeper foundation in place to help them weather the storm. When it comes to smaller enterprises, though, often the tiniest shift or change in the business landscape can lead to challenges.
If you own or operate a small business that has survived the pandemic thus far, you’re likely well aware that the turmoil isn’t over yet.
Here are some cost-cutting suggestions to help financially situate your company in the best manner possible for the unknown months and years ahead.
7 Cost Cutting Measures To Implement in Your Business:
Utilize Online Marketing
One of the easiest areas where small businesses can quickly and effectively save money is with online marketing. Funneling your marketing dollars into the e-commerce marketplace isn’t just a good way to cut costs, either. It’s also an effective way to reach your audience. You can utilize a variety of different online marketing channels, such as:
- Cultivating a social media community.
- Creating valuable content on your website.
- Utilizing search engine marketing (SEM) tactics, such as pay-per-click ads.
- Building an email list of opt-in subscribers.
- Working with influencers to promote your brand and products.
Most of these options are either free or extremely affordable. When they do cost money, they can be scaled to whatever budget you’re working with.
Online marketing also works well with B2B customers. While B2B businesses are less focused on mass appeal, you can still use online platforms to do things like educate your customers, provide personalized online customer service portals, and promote online discounts.
All of the above recommendations are both effective and affordable ways to reach your customers in an increasingly internet-driven marketplace.
Invest in Tech
Technology isn’t just effective; it’s also a money saver. Much like online marketing (which is, in and of itself, a facet of technology), tech as a whole provides an affordable and effective way to bolster your small business’s financial stability in a variety of different ways. For example, tech can:
- Enable your employees to work from home: This keeps your operation running, even during a pandemic. It also can save you money that would have been spent on maintaining a larger office space.
- Go paperless: Technology can enable you to use paperless billing, e-signatures, and shared cloud-based documentation.
- Streamline your finances: Large businesses have already blazed the trail when it comes to fintech, proving the effectiveness of activities like direct deposit, payroll processing solutions, and accounting software. Over time, these have become accessible cost-saving options for small businesses to tap into as well.
By investing in technology, you’ll save money in both the short- and long-term. It can also keep your business running smoothly, even during turbulent times, such as a pandemic or economic downturn.
Outsource When You Can
Outsourcing has long been seen as an option that was only available to big businesses. Larger corporations were the only ones that could afford to pay for enormous customer-service call centers or large firms to take care of accounting or legal concerns.
However, the internet age and the rise of the gig economy have completely rewritten the book when it comes to outsourcing. Suddenly, small companies have the option to farm out smaller activities and departments that may have previously been taken care of in-house.
Everything from digital marketing to online training and even virtual assistants can be outsourced. While you don’t necessarily want to get carried away with outsourcing every part of your business, it can be an effective cost cutting measure if your company is struggling to survive.
Sustainability isn’t just a corporate-social-responsibility initiative. It’s also a cost-conscious manner of running a business. By weaving sustainability into your corporate culture, you encourage your entire staff to keep your collective costs as low as possible. This can manifest in many different ways, such as:
- Installing smart thermostats to avoid waste as you heat and cool your office spaces and storefronts.
- Using eco-friendly products, such as LED light bulbs, high-efficiency water fixtures, and energy-efficient appliances — all of which operate at reduced costs compared to traditional alternatives.
- Embracing the “Three R’s.” That is, repairing, reusing, and recycling. If an office item is broken, do your best to repair it. If an item in your storefront no longer serves its original function, repurpose it. If a tool that your employees use has run its course, recycle it.
By focusing on sustainability in the present, you can set your company up to operate with minimal costs in the future. And, of course, the fact that you prioritize sustainability in your business operations won’t hurt your marketing message either.
If you’re able to include eco-friendly initiatives in your promotional material, it can help spread brand awareness, cultivate customer loyalty, and boost sales — all of which increase revenue and help to keep you in business.
Address Your Supply Chain and Shipping
It didn’t take long for the coronavirus pandemic to expose the inherent weaknesses that come with the “lean and mean supply chain” model. While a thin and efficient supply chain may be a great way to save money, if a crisis takes place, it can create unnecessary strain and, in some cases, even stop up business entirely for a time.
While compromises can help with short-term sales concerns, it’s important to reevaluate your supply chain going forward. This ensures that you’re still operating efficiently over the long-term. A few things to keep in mind include:
- Pricing out your options for raw materials. Are you still getting the best materials at the lowest rates?
- Ensuring that you’re paying competitive shipping rates. How much does it cost you to ship materials, resources, and products compared to before the pandemic?
- Keeping your warehouse reasonably small and well-organized. Do you know what you have in inventory at the moment? Is your warehouse operating like a well-oiled machine? Are you paying for empty space?
In addition to these basic, front-end supply chain considerations, consider the other side of the sales process. You may find that you’re shipping more goods due to the pandemic.
Make sure that B2C shipping costs aren’t eating into your profit margin too much. If that’s the case, you can try to negotiate better rates with your shipping vendor or, in the worst-case scenario, pass some of the cost along to the consumer in the form of a shipping and handling fee.
Always Be Growing
One of the most important cost-cutting measures that you can take for your small business doesn’t have to do with hard numbers at all. Maintaining a growth mindset is an essential aspect of long-term financial success for a small business.
If you want your company to continue to operate effectively, productively, and efficiently, it’s important that you maintain a flexible, learning attitude that takes three things into account at all times:
- Your customers: What are your customer’s current wants and needs? Make sure to get feedback from your customers regularly.
- Your competitors: Make an effort to study your competition. What are they doing (and you’re not doing) in order to meet your customers’ needs?
- Industry trends: Always be ready to invest time in staying up to date with industry trends.
Studying the trio of your customers, competitors, and industry is an excellent way to stay productive and proactive as you operate your business.
It helps you utilize cutting-edge technology, avoid falling behind on trends, and remain closely aware of your customers’ needs — all of which can help you maintain a cost-efficient operation.
Save Today to Thrive Tomorrow
Having a well-stocked emergency fund is always wise — never more so than during a pandemic. Whether you’re investing in remote work, hiring a freelancer, or creating an online marketing strategy, the most important thing is to make an effort to cut costs in the first place.
By striving to reduce expenses now, you can free up cash that can be used to overcome future challenges.
So start analyzing your operation. Look for areas where you can save some cash today. Then set that money aside to help your business survive and thrive in the months and years ahead.