COVID-19 threw a fiscal monkey wrench into millions of businesses’ sales projections. The good news is that as of August 2020, unemployment numbers are continuing to fall and consumers are beginning to spend money on discretionary purchases like travel and electronics. Still, most companies don’t expect the economy to rev up to pre-coronavirus standards for at least six months to a year.
If you’re not happy by your numbers or expectations for the rest of 2020, you have two choices. One is to keep current customers happy, upsell buyers on additional products, and attract new shoppers in an effort to bring in more dollars. The other is to make cost-cutting maneuvers right away. And honestly, you should probably consider doing both simultaneously to beat the odds and reach 2021 in a decent position.
Not sure what money-saving strategies will get you the most bang for your buck? Consider the following eight ideas.
1. Ask Your Employees to Point Out the Fat
Guess what? Your workers know exactly where you’re spending too much money. Under ordinary circumstances, they’d probably just let you keep putting dollars down the drain. But if you ask them, they’ll quickly help you understand where you can save a little.
Maybe no one eats those healthy snacks you buy for the kitchenette. Or perhaps the employee subscriptions to Spotify go unused month after month, even though you thought they were a perk. Gather some of the employees you trust the most and allow them to tell you where the leaks are in your financial spigot.
2. Join a GPO
You might just be a small shop in the scheme of things, but that doesn’t mean you can’t get the power and leverage of group-negotiated rates on items you use regularly. Jot down all the materials, furnishings, equipment, products, and even services your business depends upon. Then, investigate joining a group purchasing organization (GPO) as part of your purchasing strategy.
GPOs are cost-effective methods of bringing together like-minded companies with similar needs and getting them better deals than they could negotiate alone. From paper for your printer to mayo for your workplace cafeteria, no piece of merchandise is truly off-limits. Even if you think you’re already getting the best prices on the market, take a GPO for a test run. Bonus points if you find one that doesn’t charge you anything for membership but gets its dough from its partner suppliers.
3. Curb Unnecessary Spending
Take a weekend or set aside a day and scour through your expenses from the beginning of 2020 until this week. This will probably take some time, and you may have to use your credit card statements to help you remember everything you bought.
After you’re finished, consider where you might be spending too much money. It could be on attractive, but unneeded, furnishings for your office, or digital marketing ads that aren’t producing anymore. Just make sure that whatever you put aside is truly unnecessary before making cuts.
4. Renegotiate Contracts
Do you have contracts with some of your vendors? Give them a phone call to see if the contracts could be renegotiated. If you’re locked into a contract for a specific period, inquire about a buyout. Sometimes, buyouts can be cheaper than continuing with an expensive arrangement.
Never assume that contracts can’t be changed. Your vendors don’t want to lose your business, particularly now. After all, they’re probably in a cash-crunch position, too. Even if they won’t budge on price, they might be willing to offer discounts if you pay invoices immediately rather than waiting several weeks until the official due date.
5. Buy Used Items
You’re going to need to upgrade technology and maybe even furniture. You might even want to buy printers and adjustable stand-up desks for all the workers who are telecommuting. However, you needn’t break the bank to get quality things..
Sometimes, buying gently used office supplies and equipment can make sense. As long as the items you purchase are in like-new condition, you can usually save quite a bit. Think of it like buying a pre-owned car with only 5,000 miles on the odometer. No, the car’s not new. But if you take care of it, you could conceivably get more than 100,000 or even 150,000 additional miles—and all without paying retail.
6. Look for Free Software and Systems
Free software is everywhere on the Internet. If you were going to upgrade or change your systems anyway, you may want to look into free platforms and portals that tech experts recommend.
The only caveat to this strategy to lower your expenses each month? You do need to be careful about customer and employee information. Never put any sensitive material at risk of a potential data breach.
7. Hire Only If Necessary
Should you bring new people into the fold or put your recruitment and onboarding on ice for the coming months? Only you can decide what’s right for you and your team. Nevertheless, if you can get work done without overstressing your employees or risking their disengagement, you may be wise to wait.
On a positive note, waiting to hire could save you enough to give everyone else an unexpected end-of-year bonus. That would be a nice treat, especially for personnel who worked like crazy to keep your business afloat during the deepest, darkest moments of quarantine.
8. Make Your Whole Workforce Remote
Many company leaders once viewed the idea of 100% remote corporations with curiosity, but they didn’t think remote life could work for their teams. Then along came COVID-19 and their minds were changed quickly and forever.
To radically reduce your spending, you could always get rid of your office space lease and let everyone work from their homes. Employees overwhelmingly support having flexible working options. Plus, if a second wave of coronavirus moves business back into telecommuting mode, you won’t be paying for rooms you aren’t using. It’s worth consideration, even if you end up deciding you still need a brick-and-mortar location.
Money still doesn’t grow on trees. That’s okay. You can still feel like you’re plucking money off low-hanging branches by taking a serious, microscopic-level look at your spending. By the time New Year’s rolls around, you’ll feel relieved that you tightened your belt a bit in late summer and throughout the fall.