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The Importance of Cutting Costs during the Coronavirus Pandemic

The Importance of Cutting Costs during the Coronavirus Pandemic

The Coronavirus has already altered the way millions of individuals live, the economies in which people work, and how businesses operate. In a bid to stop its spread, many small and large companies have closed down—action that has taken a toll on every sector of the economy, globally. Businesses are now scrambling for ways to cut down on costs to preserve profitability and existence. Even without a global pandemic, cutting down costs increases market shares, improves efficiency, and helps set a competitive price for services or products. Here are some ways companies can lower costs during the Coronavirus pandemic.

Using Print Services

Print services are programs offered by print providers that not only monitor and help you maintain your devices, like copiers and scanners, but they also meet your organization’s printing needs. Many companies are using managed print services because they allow you to buy supplies in bulk at a reduced prices. Additionally, it’s more expensive to maintain your printing devices yourself than to have an automated system doing it. By allowing print services to take care of your printing devices, your business saves more money in the long run.

Review Your Marketing Plan

Whether your business uses digital marketing or traditional forms of marketing, advertising can be quite expensive. For instance, pay-per-click ads cost your business money each time a potential client clicks on them, but unfortunately, not every click can lead to a conversion or sale. If this method of marketing is not bringing you conversions, it’s time to review your marketing plan and try something new. Sometimes your marketing efforts might be too much, so you can begin by reducing your existing campaigns and ads by up to 80%, depending on what you’re comfortable with. If you’re using several channels to advertise, put a pause on some, and focus on one or two. This will help you cut costs on advertising and will help you home in on what methods of marketing work well for your business.

Review Your Employee Policies and Procedures

Most businesses are laying off their workers to reduce costs and maximize profit; however, it might be possible to avoid this by trimming other areas first. One method you can try is to review your policies to hopefully reduce the number of expenses your business has. For example, you can freeze bonuses or limit allowances during this pandemic and reduce your employees’ salaries. Be transparent with your employees when making these decisions and ensure they understand why you have to take these steps. The goal is to prolong their pay and increase their job security while staying afloat. Review Your Short-Term and Long-Term BudgetBefore you begin cutting down costs or laying off employees, it’s vital to know your current and future expenses so you can identify how much you’re spending and how much you’re earning. If your profit doesn’t support your current and future expenditure, it might be best to close down temporarily and save the capital you have. Once the economy is up and running, you can pick up right where you left off. Alternatively, for small businesses and startups that were having a slow period before the pandemic, it may be wise to close down permanently. Luckily, you can use this time to strategize to ensure you’re ready when the economy improves.

Renegotiate with Suppliers

Rent is a significant problem for businesses during this pandemic because it takes up a huge portion of their operating costs. Try and negotiate with your landlord for relief to cut down on rent costs, so that you can stay in your location, even with a smaller revenue stream. For other supplies, try finding alternate suppliers with lower prices in the market.

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by Dirk DeBie // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.