Reducing business costs for 2021

The year of the pandemic has left many businesses reeling. COVID-19 has changed how people spend their money and industries such as travel have had no choice but to look at how they can cut costs. Business owners are facing decisions as to which cost savings they should make in the least damaging way for the mid to long term health of the business.

Here’s a quick look at some of the areas that a business could review to cut their costs for 2021.

Staff
Cutting your workforce will immediately reduce your overheads but don’t just opt for the staff who are on the highest paid wage. Staff who are on the highest salaries are more than likely to have been with the company the longest and will have a depth of knowledge that can’t be replaced with a lower paid worker. With the government furlough scheme in place until the end of April this should hopefully give you some breathing space before final decisions are made. For more details follow the link: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

IT
Those businesses who had already invested in digital transformation ahead of the pandemic definitely came out ahead this year. They were able to adapt their business processes and services quickly to meet the changing worlds needs. The pandemic above all else taught businesses that digital transformation is important and shouldn’t be an area to cut costs in. However, there are other areas within the IT department that could be reviewed. Server rooms and data storage could be outsourced to colocation data centres. Many companies offer packages that can adapt with a business demands helping to reduce costs when needed.

Go Green
Many people think going green and becoming environmentally conscious will add expense, but this isn’t the case. Many businesses use methods and practices that waste resources which normally go hand in hand with wasting money. There are lots of different small measurable ways you can introduce changes to how your company operates. For instance, going paperless will stop you having to sending invoices through the post which not only reduces paper and ink costs, it also saves on postage costs. You should also review your recycling practices and why not look at introducing a bike to work scheme to save on petrol costs.

Bartering
Bartering is the exchange of goods and services between two or more companies where no money changes hands and is probably the oldest form of commerce. But even in today’s world this old method of exchanging goods can work well between companies. It’s actually surprising how many businesses undertake this practice and are open to the idea. If you know of a business that you would like to buy something from and they would in turn appreciate your products, why not approach them to see if they would make a trade.

We all hope that 2021 will be a better year for everyone. Stay strong, keep reviewing your business practices and let’s keep everything crossed for a healthy, prosperous New Year.