Ways to Reduce Business Expenses
by Sharon Jones
Given the current situation of the world, economies around the world are getting more complicated, and it’s taking a toll on small businesses. It’s expected that after the coronavirus pandemic, there will be around 7.5 million small businesses closing in the United States alone.
This is why many businesses are struggling to stay afloat amidst the pandemic. There are various ways to cut costs while resuming operations, and here are three of the most effective options to continue business without reducing the quality of your products or services:
Outsource Your Labor
Being one of the popular cost-cutting strategies businesses have been using even before the pandemic, outsourcing specific tasks to BPOs has become a common practice in various industries. While most business owners assume that outsourcing is limited to administrative tasks, it can extend beyond that depending on the outsourcing company you hire: from regular BPOs to software-outsourcing companies that can provide specific needs.
By outsourcing your labor, you won’t have to pay for an in-house team for all your business operations. Of course, there are disadvantages and benefits of outsourcing and hiring an in-house team. It all depends on how much you want to save and how practical it is for your business to outsource certain operations.
Lower Your Office Space Costs
If your business is renting office or commercial space, it might be practical to find cheaper areas to operate for the time being if you can’t negotiate for better terms with the property owner. The closer you live to your city’s business center or high-end district, the more valuable the space will be.
If you want to cut office costs entirely, you could change your business to a work-from-home model until such time your business can return to working in an office. More companies are adapting to a work-from-home model, removing the need for an office. If your business can operate without an office and have all your employees working remotely, this is an excellent way to reduce your overhead costs significantly.
Cut Supply Costs
Your business’ supply costs can pile up and prove to be one of the most significant expenses in your operations. Now is an excellent time to start buying directly from manufacturers to avoid the added costs of shopping retail or from a middle-man that’s making the cost of your supplies higher. Now is also a good time to start buying supplies in wholesale or bulk to reduce the overall cost of supplies soon.
If you’re not willing to ask your supplier for discounts, you might want to start looking at the market for another supplier who can provide the same supplies for much less. If your original supplier isn’t willing to meet their competitor’s price, it’s in your business’s best interest to take your business with the new supplier. But if you have a good relationship with your current supplier, don’t be afraid to ask for a discount to help your operations during these trying times.
Like any business owner, you want to keep your business running and help it survive the current situation. You might have to tighten your purse and cut out a few non-essential costs in your business. But if you act smartly, you can avoid the worst of the economic changes and slowly rebuild your business when things slowly go back to normal.