The lifecycle of a business is pretty much the same as life itself; there will be ups, and there will be downs. If you look at the biggest and most successful companies of our time, you’ll almost always find examples where they went through slow and troublesome periods. The secret is learning how to cope during a downturn, so your business can stay afloat.
A key issue - during a slow period - is that your business is still spending a lot of money, but you’re not making anywhere near enough. If this continues, then you’ll eventually suffer significant losses. With that in mind, here are six ways you can save money in your business while going through a very slow period:
Most companies are guilty of spending too much on their marketing strategy. It’s clear to see why; the only way to make sales and boost your business is by marketing it far and wide. The problem is that a lot of your efforts are probably falling on deaf ears and being ineffective. So, you end up throwing lots of money down the drain.
A marketing audit basically looks at your campaign and assesses how efficient it is. You’ll see which investments are yielding the best returns, and which ones aren’t. In turn, you can stop spending money on things that aren’t producing results for your business. As a result, you can save money by reducing your overall marketing expenditure. After all, why pay for things that aren’t benefitting your company?
Employees are the source of a lot of your expenses. They require an annual salary plus a benefits package. When your business is in a downturn, it’s often unwise to hold onto all of your staff. Yes, this seems incredibly harsh, but it’s business. You can’t afford to pay for a massive team of workers, so you need to look at alternatives instead.
One idea is to make use of a virtual receptionist - as opposed to hiring an inhouse one. Here, you get all the functions of a typical receptionist, but they work away from the office. They’re not a contracted worker that needs a salary and benefits; you just pay for the service. It’s far more cost-effective, and you can save so much money. Plus, you don’t lose out on anything as they perform all the same roles as a traditional receptionist; answering calls, replying to emails, organizing your schedule, etc.
Following on from the point above, you can slash your business expenses by reducing how much you spend on your office every month. Think about moving out of your existing office and finding one that’s smaller and less expensive. As long as you can still do your work and be productive, that’s all that matters. You could even reduce office costs entirely by working from home. Nowadays, thanks to could technology, it’s easy for businesses to be run remotely, with different workers all working together from various locations.
The only issue you have with downsizing is that you’re worried it hampers your business reputation. Well, you can solve this by getting a virtual address. Effectively, this gives you a professional business address - without the high-costs of renting a big office in a coveted location. So, you can work from a smaller place, or home, and maintain an impressive reputation.
Do you have suppliers that your business relies on to stay afloat? If so, then you need to think of ways of reducing the cost of supplies. When you’re going through a slow period, you can’t afford to pay for things if you’re not making enough money. So, consider switching suppliers and looking for a cheaper option. If you’ve had the same supplier for years, then it might shock you to find cheaper options out there. Often, you become so used to the same supplier that you don’t even bother to check if other companies offer better rates.
Alternatively, you could threaten to leave. This may influence your suppliers into bartering with you and offering a better deal. Play on the idea that you’ve been a loyal customer, but you just can’t keep up with the payments anymore. They won’t want to lose a client they can rely on, so they may offer you a cheaper deal.
Businesses spend a lot of money on insurance every year. Of course, you need to protect yourself, but are you paying too much for things you don’t really need?
One way to save money during a slow period is by reviewing your insurance requirements. Look at what you’re paying for, then think about if it’s essential. You can maybe reduce the amount of cover you have, and this could save thousands of dollars every year.
Every year, the taxman will come calling. You can’t avoid this, and every business should pay tax. However, you can save money by reducing your tax bill - legally, of course! You’re allowed to put legitimate items down as deductions on your tax bill, which lower the amount you have to pay. You should check with your accountant before doing anything.
So, go through all of your receipts and books to see if you can add things to your deductibles. Think about all the train journeys you took on business trips, think about general operating expenses, and so on. It will amaze you to see how much money you can save by lowering your tax bill, improving your financial position during this troubling period.
At the end of the day, all businesses go through slow periods. The ones that make it out alive are the ones that learn how to manage the bad times. You can’t afford to keep spending money and acting like everything is okay. Eventually, you’ll run out of funds, and your business will need to close. So, take a look at the six ideas presented to you above. They will all help you cut your ongoing costs and make it easier to stay afloat.