5 Tips For Cutting Business Costs During The COVID-19 Recession

5 Tips For Cutting Business Costs During The COVID-19 Recession

Practically overnight, the coronavirus pandemic changed the way we live and do business, and in some cases, decimated entire industries for months on end. If you’re still operating at your usual capacity, count yourself lucky – the pandemic has already forced 100,000 small businesses to shut up shop forever, and there are thousands more waiting in the wings. In order to survive, you’ll need to be smart with your marketing and cut costs where possible to increase your profitability. Below, we’ve rounded up some tips on properly trimming the fat…

Say Goodbye to Frills

Over the past decade, businesses have been able to splash the cash on expensive lunches and staff perks to boost morale and reward good work. But in these times, it’s now essential that you tighten the purse strings. Stop offering free drinks and snacks, cut back on training, and look for ways to limit expenditure in the office. For example, do you need a radio license, or can you get by playing royalty-free music from the internet? Small cuts make big changes.

Stop Travelling for Meetings

The chances are that some of your team travel to meet with clients or contractors, and whilst face-to-face contact is necessary in some cases, most business can be conducted over a phone call or Zoom meeting. In the short-term, you’ll help to reduce the spread of COVID-19, but in the long-term, you’ll save thousands on fuel, air travel tickets, hotels, and food.

Outsource and Lay Off Staff

Though it’s something most small businesses want to avoid, cutting your workforce may be the only option in today’s turbulent times. After months of furloughing and government loans, it may be that you’re unable to finance your business in the way you once did. To alleviate some of the pressure, outsource parts of your business to cut costs and ensure you’re able to deliver a seamless service to customers. From customer service to working with an FM provider, it’s easy to shave off thousands of pounds on your firm’s monthly running costs.

Optimise your Supply Chain

Some senior leaders think that the only way to increase profitability in volatile times is to cut personnel, but that’s not the only solution. Speak to your supply chain heads and look for ways to bring down the average cost per product sold. In the service industry, cuts can be made by switching to free software, limiting meetings, or increasing your hourly rates.

Don’t Cut your Marketing Budget

Finally, be careful when considering your current marketing efforts. This is often one of the first departments to be cut when a recession hits, but it’s a silly idea. With no marketing, you will struggle to attract new customers and retain existing ones, and taking a sabbatical from marketing can encourage your competitors to outmaneuver you. By all means, change the way you market your business, reducing your overheads and outsourcing work, but don’t pause your activities, or this could spell disaster for your business. Think strategically here.

Do you have any tips for cutting business costs? Let us know and check back soon for more.