As a businessman, one of your many concerns in trying to keep any-sized business afloat is the budget that you happen to have. Sure you may have some major capital and you may be doing fairly well in your industry, but sooner or later you’ll have to deal with situations that force you to engage in some cost-cutting. These days, most especially, you’ll find that you’ll need to focus on that more often than not (the economy isn’t really helping anyone right now). The trouble is, of course, that it’s so bloody easy to get cost-cutting tactics wrong.
How to lose money from cost-cutting
Some people seem to think that saving money is just a matter of cutting corners left and right to lower overall spending within the business. Of course, it’s never as simple as that. Cutting corners is all well and good, but you need to know which corners to cut, and which corners cannot, under any circumstances, be cut. Sadly, there are many inexperienced businessmen out there who go straight to reducing the budget for the following:
- Employee perks
- Customer service
Mind you, it’s perfectly normal to instinctively take money off of those things. After all, you’d like to think that your employees will be willing to make some sacrifices for the sake of your company. You’d think that cutting back on the number of people who deal with customers is okay because there’d be fewer customers during an economic crisis anyway. You’d think that promoting your product is less important than actually producing a great product at this point in time. It all sounds so logical, but acting on this flawed logic actually just makes things bad for you in the long run.
Cutting back on employee perks makes your people feel undervalued, and they will work LESS HARD for you. Cutting corners on customer service just makes your customers unhappy with you, and that will cause them to leave you for a more customer-focused competitor. Lowering the marketing budget diminishes your visibility in the eyes of the market. You don’t want ANY of this to happen.
The RIGHT way to manage your budget
If you REALLY want to reduce spending within your business, you need to be smart about your cost-cutting tactics. Find ways to save money without shirking responsibilities to your employees, customers, or company. Don’t just take money away from something; instead, invest in more cost-effective solutions. Some things you can do to run a successful business for less are as follows:
- Shift to a BYOD or virtual office arrangement
- Take advantage of credit
- Discourage overtime
They’re not really obvious solutions to financial challenges – at least, they’re not the first answers that come to mind when you ask yourself what you can do to cut back on costs. But they can be really effective in reducing your total business spending without inconveniencing the people involved.
Encouraging your people to bring their own devices allows them to use gadgets that they’re comfortable with, while instituting a virtual office gives them the same perks with the added bonus of being able to work wherever they want. With this system, you don’t have to pay for hardware or office space; all you’ll need is the right software. Meanwhile, credit rewards can actually help you get discounts or perks that remove costs from your bottom line, while taking away overtime not only takes overtime pay off the table but also prevents you from overworking your employees. It’s a GREAT deal.