COVID-19 could last for much longer than anticipated. Sadly, that not only means small businesses are going to continue to be negatively affected, but it’s now essential for small businesses to leverage cost-saving strategies within their operations wherever possible. Whether it’s trimming operational costs or planning for the short- and long- term months (and slower seasons), consideration of these cost-saving strategies can make a massive difference when it comes to keeping business cash flow positive to survive this pandemic. Does saving money, without affecting current business operations, excite you? Well, you’re in luck. Here are 5 cost-saving strategies every small business should implement, whether that’s during or post-COVID. 1. Office Space—Downsize or Eliminate to Save on Overhead For some entrepreneurs, working without an office space is unthinkable—and for good reason. Office space is synonymous with employee engagement, productivity, and a sense of community and culture. Although these things are true, it can also serve as a major overhead cost to small businesses. Right off the bat, one of the key cost-saving strategies with or without COVID is to downsize your current office space. Better yet, look into making remote working your new normal. If you do choose to keep your office space, you don’t need to spend a fortune on renting an office. Do your due diligence by making a pros and cons list, researching rental leases in the area of your choice, and ensuring the ultimate decision aligns with your long-term business goals. 2. Streamline Your Marketing Marketing efforts are crucial to the success of all businesses, but it doesn’t have to come in the form of expensive print and radio ads or glossy print brochures. The key to increasing the return on investment (ROI) of your marketing dollars is to periodically review what works and what doesn’t. Visit each aspect of your marketing efforts to see what’s working and what’s not. Is it Google ads that are increasing business profit or site visits to your website? Or is social media the main reason for increased sales? Whatever that is, focus more on the marketing strategies that are actually bringing in revenue with the capital that you’ve invested. For marketing, it’s also a good practice to direct efforts on cost-effective strategies like targeted pay-per-click online advertising—especially in the digital age we currently live in. From there, build an email list to stay in touch with customers and prospects, but be sure to focus on providing value in those emails and messages at every touchpoint. 3. Reduce Business Travel Pre-COVID days were when our calendars flourished with team events, conferences, trade shows, and other business events. In recent months, networking and professional development activities are all done virtually. That’s not a bad thing though. Cost-saving strategies like reducing business travel can put a heck of a lot of cash back into your small business (and your pocket). Instead, spend time joining the rise of online learning. E-learning typically requires 40% to 60% less employee time than learning the same material in a traditional in-person setting—which makes it even more affordable for small businesses and their employees. Plus, the upside to COVID in this regard is that travelling is one of the last things most people want to be doing right now anyway, so FOMO is unlikely. 4. Take This Time to Negotiate Improved Deals with Suppliers It’s always a good idea to review your supply chain as part of ongoing cost-saving strategies. Look through the current list of suppliers to identify areas where you can save some dollars. In a post-COVID world, small businesses everywhere will continue to recover from their losses for months or even years, so it’s not the time to sit and relax. Instead, focus your efforts on negotiating with current suppliers or revising your own price. Depending on your existing business relationship, be sure to approach communications in an open, transparent way when asking to reduce rates. The worst thing they can say is no and if so, you can still shop around. To save time, the best way to approach negotiation is to start with your top clients—whether that’s by profitability or working relationship. Small business owners who use Kashoo can easily identify their highest invoiced clients with our new feature. The ‘Contacts’ feature allows them to see who their most profitable clients are in terms of cash flow, therefore who to spend the most efforts on. Likewise, they can also view the highest billed supplier to see where they can reduce operational or inventory costs. 5. Cancel Non-Essential Monthly Subscriptions and Services If you budget monthly, you’re probably just as shocked at how quickly and easily monthly subscriptions can add up. Much like ‘scope creep,’ subscription creep is a real thing. It’s truly shocking how many subscriptions we pay for, but don’t use or need. Although Netflix is clearly essential (duh), there are others that seem minuscule at the time of purchase but can add up to hundreds of dollars each year. Whether that’s an office cleaning service, subscription boxes, magazines, or one of the five video streaming services you don’t really need, take this time during and post-COVID to cancel non-essential items from your budget. Scotiabank has a great article on what an ‘essentials-only budget’ should look like if you’re feeling lost. Are some of your top cost-saving strategies to negotiate better deals with suppliers or to simply reduce operational costs? If you’re not sure where to begin, be sure to sign-up for TrulySmall Accounting’s free 14-day trial to see why other small business owners love Kashoo when it comes to understanding their business.
