There is little denying the challenge that lies ahead for many businesses as inflation, interest rates and energy prices all continue to rise. It is clear the increasing cost of doing business has already begun to take its toll, and with the current situation showing no signs of abating, it is essential for business owners to identify ways they can reduce their overheads.
By addressing the issue head on and dedicating time to explore ways of saving money now, business owners can achieve long term efficiencies for the future.
Financial efficiencies
A common mistake made by business owners is automatically looking for “big bang” savings. Big savings are great, but there is value in identifying small ones too as these smaller savings are generally more sustainable and can be steppingstones to larger changes later down the line.
A good place to start is to look for hidden expenses – every business has them. By shining a light on these, businesses can get a head start on reducing their costs. By reviewing expense channels regularly, company heads can eliminate perhaps dated commodities that are still costing the business money. For example, monthly subscriptions – ask the team if they are still using them, whether just one per team would suffice, or whether that particular subscription is needed at all.
Routine is the enemy of saving, so checking in with existing providers and seeing what they can offer is another good way to cut spend. Meanwhile, for larger suppliers, agreeing extended credit terms or early-payment discounts to release more funds and ease pressure can be a massive business boost.
For many businesses, their biggest monthly expense is rent. Owners should assess their real estate options and consider alternates such as subletting or downsizing – especially if a large proportion of the workforce now work from home. The pandemic made the hybrid-working model the norm and this can work to the advantage of small businesses. There are a number of small but effective policies employers can bring into effect, such as having set days in the week when the office is open. By doing this, business owners can be much more efficient with their energy bills, particularly with costs being so high at the moment – it can be extremely expensive to heat an entire office when only one or two members of staff are in!
Automate always
Automating repeatable tasks is a win-win solution because it reduces operational costs while boosting efficiency. For example, something as simple as adding a chatbot to the company website and working to develop a better ‘Help Centre’ can reduce employee time spent on calls, allowing them to concentrate on more value-add activities that contribute to the business’s growth.
SaaS solutions are capable of automating entire parts of the business process. ID-Pal, for example, helps businesses verify identity and address documents to allow for seamless, faster onboarding of new customers, as well as new employees, in real-time. It automatically delivers GDPR compliance, eliminates the potential for human error and prevents fraud at source, all in the one solution. There is a world of equally clever platforms out there designed to optimise processes from the management of employees and expense processing, to CRM, customer experience and compliance.
Time is money
Where tasks cannot be automated, and employee time does need to be invested, efficiency is key. When arranging a meeting, all members of staff should ask themselves – is this meeting needed? Far too often, especially in today’s remote set up, calls are booked in for something that could have easily been handled in an email.
Lost time is a hidden cost, so it is important not to waste it. Employers should avoid taking up valuable resources with multiple members of the same team when one representative or an email could work instead – their time has a value.
All processes should be reviewed with the aim of establishing whether there is someone in the team that could benefit from role development if more time was created for them. If there is, and if it would benefit the broader business, it is worth finding a way to make that happen.
Avoid reducing team size
Business owners should avoid redundancies if at all possible – rehiring after the turbulence passes when markets settle and costs normalise could be difficult and costly. Holding onto staff and keeping the same culture will be almost impossible, so options such as reduced hours or even exploring furlough are worth considering.
Getting under the hood of their business is a beneficial exercise for business owners to set up a template to perform these cost assessments annually. In the long-term it will allow them to find efficiencies and help their business grow and scale, no matter what the wider economic climate.
