Companies large and small are struggling in this age of COVID. In Chicago alone, an estimated 4,000 small businesses have shuttered. The Washington Post reports that over 100,000 small businesses nationwide have “closed forever.” And it’s not over yet. Is your business struggling to stay afloat? Before your business becomes part of these alarming statistics, take action with some of the following cost-cutting ideas.
Slash Marketing Bills
The age of social media and the plethora of available DIY marketing tools make marketing the first place you should look to for cutting costs. Businesses of all sizes can market alongside the “big boys” for pennies on the dollar with a few strategic moves. Here are some ideas for marketing on a budget:
- Start a free Facebook business page. Post timely and informative content for your existing and future customers. If you can’t afford to pay a writer, post shared content from other places that you think will add value for your readers.
- Start a free Hootsuite account to post across Twitter, Instagram and Linkedin. The convenience of having access to all these social media accounts on one dashboard will save your admin person countless hours.
- Share short videos on Facebook and Instagram. Let your followers see behind the scenes at your company. The videos only need to be a couple of minutes long and you can use any smartphone to record the action.
- Cut print advertising. Print advertising isn’t dead yet, but the return on investment isn’t what it used to be. Most people consider printed mail flyers junk mail, and fewer people read actual newspapers than ever before. Community coupon books aren’t great value either, as you’re competing with all the other businesses in your local area.
With a little reflection, you may find that you don’t need as much office space as before or at least you might be able to economize with space. Pull out your lease and see if the early termination fee is bearable compared to the money you’d save for the rest of the year. Don’t forget to factor in the actual cost of moving, too. If you can’t get out of the lease or the numbers don’t work, consider subleasing a portion of your office space to a smaller company. Even if subleasing isn’t allowed in your contract, talk to your landlord. They may be willing to make a concession for you, given the current economic climate.
Negotiate Prices With Vendors
Call up vendors and see if you can get a price break, even if it’s just temporary. Most vendors will be willing to help if they can in order to keep your business. If they can’t give you a temporary discount, consider asking for longer payment terms. At least if you get that, it will help with your cash flow. If that’s out of the question, you might have to start shopping around for less pricey vendors. Keep that as a last resort, since changing vendors is risky; you might find yourself in a worse position than you were with your old vendor.
Install a Programmable Thermostat
If you’re running an actual office with employees, it’s highly likely that the area around the thermostat is as busy as the water cooler. In offices around the world, employees are jacking the thermostats up and down; sneaking over to turn it back up when it’s been lowered and vice versa. This wreaks havoc on energy bills. It’s worth it to pay to have a company come out and install a programmable thermostat. Program it yourself within reasonable parameters and then cover it with a thermostat lock box to prevent wild fluctuations by employees.
Get Comfortable With Telecommuting
If you were one of those employers who was against telecommuting before COVID, it’s time to get more comfortable with the idea. The biggest worry was that employees would spend more time snacking in front of the TV than taking care of business at home where there would be no one looking over their shoulders. But if you can’t trust your employees to get their work done at home, then how can you trust them at all? And, if an employee who telecommutes takes advantage, you’ve got cause to dismiss. So really, there’s no risk on your part, and a lot of benefits. If you allowed everyone to telecommute, you could give up your leased office space and all the other added costs that go along with it, including your own fuel to go back and forth, utility bills and more.
Cut Office Hours
If telecommuting just isn’t an option for any reason, consider cutting office hours. Few people will complain about getting to leave earlier or being able to take Mondays or Fridays off. You could close the office on those days and outsource a receptionist service to answer any calls that come in. You’ll save on energy bills and on pay for any non-salaried employees.
When things are dire and you need to stop the money bleed as of yesterday, consider selling some of your equipment. You might be able to bring in some cash by selling surplus computers, monitors, chairs, desks, printers, etc. Advertise on your local Facebook marketplace, Craigslist or eBay. This is a big step for drastic times, but it is an option for businesses that are really in financial trouble.
Don’t wait until it’s too late to let your CPA know that you’re struggling to make ends meet. Your CPA is a valuable resource for cost-cutting measures and tax strategies that can make the difference between staying in business and closing doors for good. The earlier you identify a problem and consult with your CPA, the more cost-cutting options you’ll probably have.