How to reduce crucial costs for your business
How to reduce crucial costs for your business
One thing that the Covid-19 pandemic has taught businesses is that it is important to run lean and efficient. This is certainly an unprecedented situation, but it showed that if companies have any amount of downtime, it can be incredibly difficult for them to pay bills and sustain themselves.
Some business costs are essential and unavoidable - but for others, there are opportunities to actually reduce the amount your organisation pays out.
In 2021, it is up to companies to find ways to minimise their costs to give themselves the best chance to survive and later thrive. Here we take a look at some key ways that you can reduce costs at your business.
Monitor your power quality
Problems with power quality can easily slip under the radar. Many business owners don’t realise that there are different levels of power quality - nor the potential issues that low power quality can cause.
“Any time that poor power quality is causing trouble with the operation of electrical devices, it is a serious issue that needs to be addressed,” says Kate Edwards of Outram Research “not only does poor power quality have the potential to damage equipment - it can also cost your company an excessive amount on your electricity bills”.
Power quality can be monitored with devices or companies can be brought in to handle it for you. This can be especially important if your business runs a large amount of electrical equipment.
Mitigate premises costs
One of the largest costs for any business is the amount you pay out in your rent or your mortgage. To avoid certain extent this may be unavoidable - you may be in a long term contract or have specified mortgage payments to make each month. However, that doesn’t mean that you have no options.
The first thing to say is that landlords can be flexible. If you are a tenant in commercial premises, your landlord will want to keep you there; finding new tenants at the moment is a real challenge. See if you can arrange a reduction in payments for the time being to ensure that you an stay in the premises at a lower rate.
Alternatively, you may like to consider an office share. If you have a mortgage to pay this can be extremely useful. Some businesses have found paying for their own office to be too expensive and have moved out - but still require some office space throughout the week. Offer your premises up as a part of an office share and split the costs.
Be smarter with staff
Staff costs are usually by far the largest business expense. This is something that can’t be helped - however, you can find ways to be smarter. For example, consider issues like bonuses and other cash incentives.
In these tougher times, it can make sense to offer a range of different incentives beyond money such as more time off or extra privileges.
Final thoughts
Reducing costs has become essential for organisations of all sizes in 2021. If you want your business to thrive in the future you need to become leaner and more efficient.