Cost Cutting:
How To Do It Without Harming Your Business
Businesses want to make a profit – the difference between the revenues they earn and the money they have to spend to generate those revenues. There are, therefore, two routes to increasing profits: increasing revenues and cutting costs.
In this post, we will focus on the latter: cutting costs. Sometimes, brands are reluctant to cut costs because they worry about the effects that doing so will have on their brands. They fear that if they cut costs too much, then the quality of their products and services will begin to fall.
Fortunately, there are usually – if not always – opportunities to cut costs that have no meaningful impact on your business’s performance at all. You’re streamlining, but with none of the downsides. Let’s take a look at some of the downside-free cost-cutting methods you could use.
Negotiate Your Rent
When you think about it, the amount that you pay in rent has no impact on the quality of your business. It’s just a fixed cost for using your current premises. Thus, negotiating it down is a way of reducing expenses with few, if any downsides.
The best way to get your rent down is to think long-term. If you know that you’re going to be in the same premises for the next ten years, then it is a great idea to lock in your rental agreement with your landlord. Just tell them that you’ll guarantee payments for the foreseeable future, so long as they cut the monthly cost of rent. Remember, most commercial property owners would always prefer to have a stable and slightly lower income than a high one that fluctuates all the time.
Switch To Renewables
You might also be able to save money on energy bills if you sign up to a community solar project. The idea here is to share the cost of capital with other people in the community, thereby lowering the cost of energy production for everyone. Check the prices in your area and see if they come in cheaper over the long-term than traditional grid power. Usually, they do.
Invest In Employee Health
When employees’ health and wellbeing begin to suffer, it can take its toll on your bottom line. Once burnout starts creeping in, standards start declining and people take more sick days. Furthermore, it can even lead to a higher staff turnover as workers look for easier roles and cushier positions.
Investing in the health of your employees is, therefore, vital. Think about how you can improve their wellness at work and manage their stress levels. Be sure that they’re taking breaks in the evenings and weekends and that they have real downtime, away from the constant barrage of emails.
Shift To Remote Working
Lastly, you might want to consider permanently shifting to remote working. This way, you can lower or eliminate many of your fixed premises costs, with minimal impact on your business as a whole. If you still need office space, you can always rent it by the hour instead of paying for it all month long.
