The new decade is giving everyone a tough time, especially businesses, as the global pandemic changes the way of doing things. Companies are now trying to adapt to a new normal, preparing themselves to accommodate spikes and drops in customer demand. Unfortunately, these changes have been overwhelming for business since they are witnessing substantial losses in sales and profits.
If the economic devastation led by Covid-19 continues to spread, many companies might face compulsion to shut down due to persistent losses. Are you wondering how to go about it? Optimize your company’s financial health and focus on shrinking operating expenses. These are day-to-day maintenance, repair, rent, and other administrative costs, absorbing your profits.
Before you start eliminating these expenses, gain an understanding of how it influences your business. As a result, you can dig up the best ways to keep them low, while preserving your company’s profit and employee’s productivity levels. If you are looking for ideas to tone down expenses, here we are unmasking five ways to reduce the new normal costs.
Shift to Coworking Space
Rent expense consumes a big chunk of your profits. In these uncertain times, businesses are not able to handle such costs due to declining sales. Surprisingly, coworking spaces can alleviate the financial burden by offering a shared working space. You will find employees from different organizations and companies working under the same roof but on their ventures.
The coworking spaces are versatile and diverse, accommodating brands with different working environments. Whether you need a quiet area to work or a large table for a team meeting – all kinds of spaces are available. With businesses bidding farewell to conventional offices, you can find coworking space in India, Japan, Hongkong, Australia.
It costs way less than the conventional office rent, helping you adjust to the new normal. Likewise, the shared amenities and utilities reduce the internet and equipment repairing expenses.
Cut Production Costs
Business owners are always hunting for ways to cut back on material costs and optimize resources. It has become more meaningful, allowing businesses to combat this challenging time. Here are a few suggestions.
- Lease the unused space to another business. It could work like a small office or a spacious warehouse space.
- Measure the operational efficiency to ensure you are working at maximum production capacity. Feel free to set some performance parameters that reflect goals and offer incentives.
- Sell the leftover cardboard and papers or use your waste to create another product out of it.
- Monitor inventory and work on increasing the inventory turnover because stock lying in the warehouse is more of a liability.
- Pay suppliers quickly to get rebates and discounts.
Utilize Virtual Technology
In this tech-savvy world, overlooking the benefits of technology will not do any good for your business blog. It can be a great help in these unprecedented times, helping you slash the unnecessary expenses. Believe it or not, technology provides a replacement for everything. You can switch to virtual meetings through video conferencing apps like Skype Business, Zoom to close the door of travel expenses.
Similarly, go paperless by shifting to technologies like Google Drive, Dropbox. It lets you store tons of documents and files without charging a penny. Alongside saving up on the hefty printing costs, you can utilize your storage space more efficiently. Moreover, use free applications and online payment services to dismiss additional bank charges.
Scale Down Financial Expenditure
When it comes to reducing expenses, people keep making variations to maintenance expenses rather than paying attention to financial expenditure. Look at your business accounts to find places where you can cut corners.
- Save money on insurance by reducing cover or compare providers for the most competitive rate.
- Think of consolidating insurance policies or bank accounts.
- Although interest rates seem appealing, it is not the right time to drown yourself into debts. Do a cost-benefit analysis, consider the effect of debt payments on cashflow and opportunity costs.
- Reduce the credit-time for customers to improve cash flow.
- Consider altering the method of depreciation to elevate profit margins.
Modernize Marketing Efforts
No one would be ready to cancel paid advertising if it is working, but it can be worthwhile to try cheaper alternatives. Begin by creating social media profiles and start engaging with audiences online. Build your email list to implement a referral program. After all, the customer’s word of mouth holds supreme importance, boosting the chances of sales.
Explore the social media forums as it offers numerous features for businesses than one can have in traditional marketing. Focus on building networks with industry specialists, customers, and suppliers to reduce the need for advertisement. It will help you keep up your marketing game while cutting back on ineffective campaigns.
Bringing it All Together,
Indeed, adjusting in this new normal is no easy feat, especially with businesses trying to make ends meet. Therefore, you have to adopt a smarter approach to reducing expenses, ensuring no compromise on quality and business performance. Virtual technologies, collaborative working space, and digital marketing work like cheaper alternatives, helping you survive in this new normal.