Businesses all over the world are dealing with dramatic and sudden revenue loss. The results of this economic slow-down have yet to be fully realized, and no one can predict how long this will last or how serious it will get. Reducing overhead right now is a prudent business decision—both reactive and proactive.
There are a few quick and easy ways that small businesses can cut costs in order to cope with this temporary downturn without firing full-time staff.
1. Trim Down Marketing Efforts
The grim reality is that people are going to have less money to spend in the coming months, and your marketing approach needs to address that change in spending habits (along with the change in revenue if you’ve had to close a brick-and-mortar store). Take some time to reassess your current marketing strategy. Are you focusing most of your marketing dollars on expensive products or services, perhaps even ones that you can’t currently provide? Redirect that money to a smaller or more affordable option that is isolation-friendly. We are seeing this in the food and beverage industry as restaurants redirect their efforts to take-out and delivery. All types of businesses should use their resources to find a creative alternative to their in-person product or service—if you don’t have one yet, it’s time to create one.
Hold on to your social media marketing dollars, as people everywhere are going to be using these channels far more often.
2. Get Out of the Office
While this is advisable on so many levels right now, it can be a money-saving endeavor, too. Even if your region isn’t currently required to close offices to reduce the spread of COVID-19, offices can be a major money-pit. Even if you can’t get a break on your lease right now (though many landlords are being lenient and at least deferring payments), you can save money on utility and internet bills by having your employees work from home.
I’ve long been an advocate of the remote office—not only does it save money, but it can also keep your teams’ spirits up to offer flexibility and more time with their families.
3. Cancel the Calendar and Comforts
Check the calendar. Are there any staff trainings, company retreats or holiday parties planned? Cancel them now. We still can’t predict how long-lasting or far-reaching the impact of this virus will be, so it’s best to play it safe, even if things are scheduled for late summer and fall. It’s a bummer—I get it. The cancellation might not provide you with immediate returns, it will allow you to recuperate expenses later on and keep you from getting bound into reservations and event expenses that you can’t afford.
Of course, the little comforts have to go, too. Even if it’s just a few dollars, you can save by eliminating or tightening discretionary and miscellaneous spending—snacks at the office, conference lunches. It might be a good idea to cancel some company credit cards, too, if you can afford to.
4. Reduce or Eliminate Freelance Contracts
While we’d like to get through this without taking away anyone’s paycheck, a business owner’s first and primary responsibility is to full-time, salaried employees. If you absolutely have to shave off a paycheck, it should be the paycheck of freelance contractors you’re currently working with.
Often, these freelance contracts are for nonessential work, like a brand redesign. If revenue has gotten tight, that brand redesign can wait, but your social media management and customer service can’t. If you’re legally bound by a contract, it’s worth approaching any nonessential contractors to see if they would be willing to place a contract on hold if it can’t be broken entirely.
Reduce Before You Eliminate
It’s going to be hard to keep up with this, but with these tips, and a little resourcefulness and creativity, business owners can survive. If it comes down to it, try reducing hours and even days of work before you fire employees outright. If you have good talent, do everything you can to hold on to them.
Simon Slade is CEO and co-founder of Affilorama, SaleHoo and co-founder of Smtp2Go. Through these companies, Simon provides education and resources for ecommerce professionals to start their own drop shipping business, build an affiliate marketing business and achieve occupational independence. Simon can be followed on LinkedIn and regularly comments for Forbes, Fortune, SMH and NZ Business.