Mike Giannulis Shares Some Effective Cost-Cutting Tips for Safeguarding Your Business during an Economic Downturn
(Gloucestercitynews.net)(July 11, 2020)--When the economy is healthy and functioning in a robust fashion, it is quite natural for most businesses to focus their attention on boosting sales. However, when there is an economic recession, times become challenging and businesses focus their attention on shifts. Most businesses examine the way their business is functioning while encountering challenging options on ways to sustain and preserve the organization. When businesses are finding it difficult to survive or sustain an economic downturn, they are determined to use one of the three techniques:
‘The ostrich method’ involves preserving the business status quo and hoping for the very best. ‘The bull in the china shop’ stratagem implies doing cost-cutting blindly all across the board. ‘The fox method’ involves making your business far more effective and productive so that once the economy is back to normal and in full swing, your business would be in a much-improved position for moving swiftly forward. Mike Giannulis motivates business owners to act just like the fox. Instead of taking a look at the downturn with fear or skepticism, you could use the opportunity to come up with and embrace emerging trends to stay ahead of the curve as the economic conditions are favorable again.
As per https://www.entrepreneur.com, the term recession triggers a sense of fear and insecurity in the minds of both established businesses and also, the startups. Long-term research and studies spanning numerous nations have revealed that economic recessions globally lead to a sharp rise almost double in terms of unemployment and bankruptcy rates and a drastic dip in the overall number of brand new businesses established.
We understand that during an economic downturn, it pays to keep track of every penny. Reducing business expenses is surely the way to go but it is a truly challenging process that necessitates meticulous evaluation and accurate assessment. The techniques and strategies you utilize for reducing costs could influence your business’s productivity and overall performance. Here are some effective cost-cutting tips that should help you sustain and maintain your quality and standard of excellence widely appreciated and acknowledged by your clients.
Keep Communication Open despite Economic Recession
As per https://smallbusiness.chron.com, it is of critical importance to schedule all-staff and departmental meetings with all your employees for discussing the overwhelming situation and the challenges that the company is encountering because of the economic downturn. You need to focus on preparing for straightforward clear communication and be particular and prompt regarding responding to employee queries. You must explain as a business owner what proactive steps you would be compelled to take for staying in business while the economy is in a crisis situation. This meeting must be scheduled well in advance so that your employees can absorb the shock and grab the opportunity to come up with relevant questions, discuss the situation with members of their family and choose other effective employment options.
Relocate If Possible
Several businesses rent or lease property for housing their organization. An effective and easy way of reducing expenses is by relocating to another more affordable property. Even though, property owners hate the idea of seeing too many vacant buildings or empty offices during an economic downturn. Often in the event, you are thinking in terms of relocation, you may realize that your present landlord is more than happy to renegotiate for better terms or lower rent to be precise. Whatever it is, you need to focus on cutting costs by spending less money on rental expenses.
Keep Monitoring Non-Payroll Spending Suggests Mike Giannulis
The most effective way of reducing costs during an economic downturn is by having a strict grip over your expenses. You must necessarily keep all spending under control. The most efficient way of curbing your wild expenses is by closely monitoring all business associated expenditures. A boost in oversight on business expenses and spending at once helps in modifying behavior and deterring an organization from frivolous expenses.
Moreover, monitoring motivates staff to maintain judicious fiscal discipline and total compliance to all written and even unwritten business spending policies. Businesses may be compelled to scrutinize their policies. Thoroughly scrutinizing business’s spending policies could be a perfect initial step towards reducing expenses in certain ways that would not be adversely impacting your overall business operations. You must keep track of all non-payroll expenses. You may identify and curtail any wasteful expenditure. Pinpoint the necessary expenses for your specific business.
Assess Your Technology Requirements
During an economic downturn, the staffing numbers could go down dramatically and there would be strategic cost-cutting measures in place revolving around excess technology items such as company cell phones, voicemail boxes, additional phone lines, and even hi-tech copy machines. You could reduce costs substantially by the effective renegotiation of Internet and telephone services, getting rid of excess communication lines, downsizing to a relatively cost-effective copy machine that should be well-equipped to get your precise tasks done.
Focus on Negotiating Supplier Concessions
If your company has been consistently keeping track of all its business expenses, then your biggest victory could come from effective negotiations relating to supplier concessions. A company that keeps monitoring precisely how much it would be spending on a specific product or a group of similar items that could be acquired from the same source or supplier is in an advantageous position and can prove to be useful in negotiating a huge discount.
Generally, you could obtain far more impressive and greater discounts even without committing to bulk purchases in one go. You could get committed instead to a specific volume of an item spanning over a specific time-frame. Several suppliers are more than pleased to provide impressive discounts to enjoy repeat business guarantees, particularly during an economic downturn. Look for appropriate concessions on sectors where your business tends to spend more, whether IT equipment, marketing & advertising, facilities maintenance, travel, etc.
Even during an economic downturn, top businesses are successful not only in sustaining growth but even thriving and boosting their overall market share. You must focus on investing some of your savings created via your effective cost-cutting stratagems for introducing new services and products and for reaching out to brand new markets. You could win a competitive edge and leaving your competitors incredibly surprised.
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