The idea of cutting costs within a business is sometimes discussed with slight embarrassment. There’s the idea that success means spending without caution. This idea is damaging, however, as it deters businesses from reviewing their practices and reducing their overheads, two activities that can improve their profits and resilience to market fluctuations.
As the COVID-19 pandemic has demonstrated, even the most established national and international companies can suddenly be affected in ways that compromise their standing. Such events have shown that those who build a stable business, one that is robust and efficient, are better equipped to withstand change.
Reassessing your operation doesn’t have to mean cutting corners. There are ways that most businesses can reduce their costs without compromising their quality or services. For many businesses, specific departments and processes continue for years before they are scrutinised. As an example, we have put together a list of common costly areas within businesses that might benefit from an assessment.
As technology improves, which it continues to do at an incredible rate, the usefulness of a businesses office space diminishes. Remote working, as recent events have proven, is more easily adopted than ever. Staff remain productive at home, video conferencing has grown in quality, cloud technology also eliminates the need to store and access many paper files, and the potential cost of subsidising a worker’s home office cost is far better than renting office space.
The traditional idea of a business needing an office, or one as large as yours currently might be, continues to be challenged and, as such, the justification for the overheads should always be in review.
Businesses with internal payroll departments will understand the frustration that arises when mistakes are made. To avoid these mistakes and to keep the department trained, as well as equipped with the most appropriate software, is costly. While it may seem like a justifiable cost, outsourcing to external payroll services is now more competitive than ever.
External companies eliminate the risk of mistakes, keeping their staff fully trained and up-to-date with HMRC guidelines, meaning that you won’t have to worry about sudden changes in tax law.
Often is the case within businesses that positions are opened early on or in response to an event. As time goes on, these positions are no longer necessary. Some companies act cautiously, offering limited-term contracts that are later reviewed. However, some other businesses neglect to reassess their staffing for long periods of time.
Adjusting hours and responsibilities can allow for the consolidation of positions, allowing businesses to reduce their staff costs. Furthermore, delegating responsibilities to newer employees allows them the opportunity to grow and become a better asset to the company while simultaneously alleviating the tasks expected from managers.
While reducing costs may not currently be a necessary action within your business, it is always beneficial to practice and cutting back in reaction to a sudden event may not always be enough. So, before looking forward to your businesses future, be sure to look back first.