Cost cutting tips for small business
In order to survive in this economy a small business must be able to take a look at their costs and expenses and find a way to reduce them. Since the economy is starting to rebound, many small business owners have hope that their sale will pick up and if you have been able to make it this far, you have a pretty good chance of making it into the future. Even though the economy is rebounding, you still need to take the time to undergo cost cutting to make sure you are doing everything possible to save money and provide for the needs of your small business.
Reduce unnecessary spending
There are some luxuries you use as small business. Do you really need to pay for lunches weekly? Although some of these things are nice for the staff, they may fail to recognize and appreciate them and assume they are just part of the job. It's much easier to cut simple costs that are not pressing like your salaries are. Laying off your employees should only be done as a last resort. Have each department go through their expenses and ask them to come up with different ways to reduce or cut those expenses entirely.
Reduce your travel costs
Perhaps you have a director or someone that lives far away. Instead of flying them in once a year, look into using Skype and other services. This will provide you with a chance to save money on travel expenses but you still get the opportunity to talk to them and have the involved with the business.
Vehicle expenses are another thing you need to cut costs. If you have employees running around in their personal vehicles for work-related expenses you need to try and cut this amount as much as possible. It may even be cheaper to purchase a company vehicle to use versus reimbursing your employees for their travel expenses.
Reduce your advertising
Along with cutting your workforce, you need to limit this as much as possible. Without marketing and advertising, how will people know you exist? Instead of cutting it, look for ways to reduce it. Perhaps you can contact some other companies and do a combo run on some of your advertising and marketing pieces. Turn more to online advertising versus print advertising as it is much cheaper and cost effective for your small business. Watch for other free advertising opportunities like posting an ad on your building, trading space with other companies in your industry, etc. Online advertising provides multiple opportunities to reach your customers that you will not find with other forms of advertising. Using the internet you can develop a solid marketing plan for a low cost. Consider using social media, SEO, pay per click ads, and other ways to drive up your online attention and earn the attention of new and old customers.
Reduce your contribution amounts
If you are providing retirement accounts, consider reducing your contribution amount by a percentage. Although your employees won't like it, this is a better cost cutting tip than cutting insurance and other benefits. It's also easy to increase your contribution amount in the future, allowing you to have a little time to re-accumulate your cash reserves before you start providing contributions again.
Instead of cutting jobs, cut your employees hours. Do you really need to have this many employees working at the same time or can you scale back their hours? This is a great way to make sure people still have jobs and to save money. It may be a good idea to extend your operating hours to provide customers with an opportunity to have access to your business and fluctuate the hours so you only have 1-3 employees in the office at the same time versus 6-8 all at once.