The COVID-19 pandemic has forced many businesses – large and small – to re-evaluate how they operate. This unprecedented situation has taken companies that were actually performing well pre-pandemic, and put them in a very difficult situation where they need to cut costs and spending in order to survive.
But if you have found yourself in this position, it is important to understand how you can cut these costs without having to compromise on quality. Small businesses often rely on their reputation remaining strong, so it is important to be able to offer the highest levels of service, and genuinely provide your customers with value for money.
Here we take a look at how to cut your costs while maintaining quality within your SME.
Forget bonuses
Some businesses have certainly got into the habit of considering bonuses as a mandatory part of normal working practice. But ultimately, bonuses are designed to reward staff during profitable times for their effort. And no-one is saying that staff are not putting in the effort – but these can’t be considered profitable times.
If your business needs to cut costs then staff need to accept the reality that bonuses in their contract can’t be paid to them. This is something that we have seen happen in larger organisations such as Sainsburys, but in SMEs it should be considered too.
Reduce spend on office space
There has certainly been a jump in the number of people working remotely through the COVID-19 pandemic – but this trend looks set to continue even after the worst of the situation is over. A recent statistic revealed that 54% of people want to work mostly remote even after the pandemic is over.
It could be a great idea, then, to actually reduce your spending on office space, as it is likely that your business will not benefit from having such a large space after the pandemic.
Focus your marketing
Some businesses are cutting their marketing costs, seeing it as one of the easiest changes to make that will save money without impacting the way that the company operates. Of course, the idea here is that while cutting your marketing budget may allow you to continue to make other payments, it will have the long-term effect of damaging your sales and, ultimately, your profits.
Instead of thinking about how you can cut your marketing – it can be better to consider how to focus it. What are elements of your current marketing strategy that will be both effective and cost-effective?
Invest in the right security measures
Similar to the situation with marketing – security, and specifically cybersecurity is an area where some businesses have considered cutting back in order to reduce costs. Of course, making sure that you are spending your cybersecurity budget the right way is very important – and sometimes it actually takes having work carried out to understand it.
Your business might benefit from a penetration test. If you have never had one before, penetration tests are used to help determine some of the weaknesses in your cyber defences. A cybersecurity specialist uses techniques and tactics deployed by criminal hackers to see if they can gain access to the system. Once the test is over, the cybersecurity expert will provide a report explaining how they were able to gain entry to the system and how it could be remedied.
This can provide your company with valuable information on how to safely reduce spend in cybersecurity by focusing on the most important issues.
Achieve higher productivity levels
Higher levels of productivity mean that your staff get more done and your business achieves more. This can be especially important after the pandemic, especially if you have had to let members of staff go. But there is an idea that productivity all comes down to how motivated a member of staff is – this is not the case.
In fact, productivity is more closely associated with business properly funding their employees – providing the right software, training and more.
Final thoughts
It must be said that in these challenging times, businesses are having to take steps that they had not thought of as even possible just a year ago. Companies that were extremely profitable and looking at a strong forecast for growth have had to readjust their expectations and understand that just surviving these economic circumstances is an achievement in itself.
The COVID-19 pandemic has been an unprecedented situation but businesses need to find smart ways to respond in order to have as much success as possible both during and after this difficult time.