As businesses continue to adjust to coronavirus-induced market conditions, entrepreneurs are finding increased incentive to be frugal. Revenues and sales have been shaky in both B2C and B2B sectors, prompting companies to seek new ways to stay afloat.
Current conditions aside, identifying areas where you can cut back is generally a good idea. By eliminating unnecessary expenditures and finding smart alternatives, your business will be better equipped to navigate unforeseen circumstances and the financial challenges that follow them.
What’s more, you don’t have to change your business model to accomplish this. Here are some ways to cut back without disrupting your central operations.
Redirect Resources to Top-Priority Projects
Tight times call for a reevaluation of your open projects. Determine the initiatives that are most worthwhile and redirect your resources accordingly.
One way to evaluate your priorities is by using the Stephen Covey matrix to guide you in discerning which activities to forgo or put on hold. Covey, author of the bestseller “The Seven Habits of Highly Effective People,” distinguishes between important tasks and urgent ones.
Important tasks lead you towards your larger goal, and urgent ones call for immediate attention. Whereas non-urgent and non-important tasks can be put on the back burner.
You can use this framework to direct your budget towards activities that are critical to your mission and then triage down to less important ones. This might mean eliminating “nice-to-haves.” While holiday parties and happy hours are great, reducing such incidentals will allow you to allocate your funds (and company time) to what’s most valuable.
Replace Outbound Marketing With Inbound Marketing
Outsourcing your marketing can be a major drain on your budget. Adopting low-cost strategies can help you save while keeping your business top-of-mind.
A critical tactic is to focus on inbound marketing. Inbound marketing is inherently less expensive than its outbound counterpart, which centers around hefty ad purchases and media campaigns.
With inbound marketing, you invite customers in — as opposed to chasing them down — through enticing content and experiences. The lower costs of inbound marketing naturally lead to an increased ROI.
Inbound marketing methods don’t have to be elaborate. One easy strategy is to replace paid internet advertising with organic SEO techniques. You can significantly improve your digital standing by simply streamlining your website. Plus, content marketing can produce a continual return on investment. Though you may pay a writer to create an article just once, you can benefit from the web traffic and leads it generates for years to come. Whereas with a search advertising campaign for example, once your ad budget runs out, your campaign is complete and so is the lead source — unless you keep spending.
In pandemic times, people are consuming digital content at a higher rate than before. In fact, there’s been a 25% increase in social media usage across the board. Your business can use this renewed potential for increased exposure to your advantage.
Remember: keeping your business top of mind and relevant is crucial, especially when sales are low. Actively managing your digital presence can support your revenue during and after the crisis.
Limit Office Overhead
Cost-cutting can come down to simply being thrifty. Whether its finding free software trials or buying second-hand materials, you can save a lot by being discerning about your office purchases.
Open-source and cloud computing is an essential asset to any frugal office. As business coach Ali Asadi observes, “You do not need to buy that expensive office software and servers when you can switch to a cloud computing vendor — Google is an example — at a fraction of the cost.”
Another great way to save money in the office is to be energy-efficient. While the saying “go green to save green” might be trite, its truth remains. Being environmentally conscious will result in decreased utility costs and bills.
There’s always money to be saved by reducing your reliance on outsourced services. For instance, cut back on professional cleaning and encourage employees to maintain a neat environment.
These steps and more can culminate in savings and better practices all-around while your main operations go unaffected.
Minimize Time Spent in Meetings
When your employees are salaried, they’re being paid whether or not they’re producing work. Superfluous meetings reduce your employees’ productive hours, which means lessened output and, ultimately, decreased profits.
Internal communication is definitely valuable, and some meetings are essential. However, being more conservative about head-count can optimize employee productivity. Doing so will ensure that colleagues’ time and energy — not to mention your revenue — are maximized.
Embrace Remote Work
Recent studies show that telecommuting saves employers money. Reductions in overhead, fewer employee absences and increased employee retention all support a company’s financial wellbeing.
According to a study by PGi, 95% of employers report that remote work significantly impacts employee retention. The same study also cites the American Management Association, who reported a 63% reduction in employee absences upon introducing a flexible WFH policy.
Working from home has become a widespread reality for businesses since COVID-19, so embracing a work-from-home culture may be a natural. transition. If working from home due to the coronavirus pandemic has proven effective for your company, reconsider an expensive office lease altogether. With workers proving they can be productive anywhere, office buildings may become a thing of the past.
Keep in mind that eliminated commutes and increased employee morale will boost employee productivity, paving the way for increased revenue.
The Bottom Line
While these cost-cutting tips are most beneficial in a crisis, they’re advisable under any circumstance.
Incremental savings on “non-mission-critical” operations, activities and purchases can add up to a significant sum. With that in mind, it’s never too early to start making smart financial decisions.
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