Tips for Cutting Costs but Not Jobs
There are many great aspects of being an entrepreneur and owning your own small business. Unfortunately the occasional need to layoff staff isn’t one of them. With a reported 70% of business costs being staffing related, many businesses first look to their employees when money gets tight. However, as a recent post by Minda Zetlin on Inc. highlighted, there are some ways that you can help reduce your business’ costs without having to lose any of your team.
One of their first cost-cutting tips is to sublet part of your office space. In addition to the monetary assistance that comes with having someone to split the rent with, there are other benefits of sharing space with the right company. Perhaps the business you bring in could be a potential partner or customer for your company in the future. Just like any roommate situation, you’ll want to take a hard look at who you’re subletting to and make sure it’s a good fit (even if you don’t end up collaborating directly).
So what do you do if you don’t have much room to sublet? Consider allowing some of your employees to work remotely. Often times this will be a welcomed change for them as they’ll be free of a daily commute but you’ll also have more room to lease out to another business. There are many free or inexpensive tools like Slack that small businesses can use to communicate with their team and stay on task even if they’re not in the same physical space. However you will want to be sure to bring your whole team together in person periodically. Additionally keep in mind that some employees will actually prefer to come into the office every day and so you shouldn’t force them to stay home.
An alternative plan for keeping your team employed without incurring the costs is to loan your employees out to a fellow business. Obviously you don’t want to turn over your assets to a competitor but perhaps you know another business that could use the extra help and skills that your employees provide that would be willing to take on a portion of your payroll. Once again you’ll want to ensure that your employees are comfortable with whatever arrangement you devise, but many will understand the predicament you’re in and appreciate your effort in ensuring their financial security. Additionally such an arrangement will make it easier to bring your team back full time once you have to money to do.
Lastly another way to minimize your costs is to negotiate with your vendors and suppliers. While there’s no guarantee they will be open to price changes, it is possible that they’ll be willing to reconsider your pricing in order to hold on to your business as a customer. They may have other conditions that go along with their discounted pricing but it’s definitely worth asking especially if it means you don’t have to lose any of your staff.
If your small business is experiencing some lean times you may feel like you’ll need to let go of some of your employees. Luckily with some creative problem solving, that might not be the case. By following these tips and thinking of other ways that make sense for your business to cut costs in other areas you can help ensure that you make it through the rough patches with your entire team on board.