As the economy worsens and recession starts to creep in, businesses find it hard to meet their expenses, and they become less productive. However, not all industries suffer in a recession. Some can thrive since their operation model is recession-proof.
But for many, they have to fall back to downsizing if they want to survive until the economy recovers. Regardless of the size of your business, you should ways for cutting back on expenses.
While no business owner looks forward to downsizing, it’s an essential process that will allow your business to remain competitive and have a chance for recovery. However hard it may be, it is the fuel for your business to do better.
If you are a small business owner, consider these five tips that can help you to maximize your downsizing efforts:
1. Relocate your Business or Renegotiate for a Reduction in Rent
As a small business owner, there is a high probability that you are leasing or renting your company space. When you downsize your business, some of your offices may not be of use. As a way to lower your costs, you can opt to move to a smaller property that is more manageable and affordable. It’s highly likely that when you bring up talks of relocation with your current landlord, they may be inclined to offer you a reduction in rent. They, too, do not want to lose a potential source of income, especially when the economy is not good. Either way, you will succeed in saving up some of the money you would have used on rent.
2. Outsource your IT Services
You may require IT services for your business to remain relevant in the competitive market. But, operating an expensive server and maintaining the employees may be hard during a recession. You should consider switching to managed IT services for small businesses. Outsourced IT services handle responsibilities that otherwise require in-house staff and dedicated infrastructure, all at a fraction of the price.
3. Regulate the Office Supplies
It’s common for employees to use office supplies excessively. You can take the chance to cut on your expenditure by regulating their use. The most efficient way may be through locking your supply cabinets and restricting their use.
4. Make Use of Excess Space
Reducing costs is an excellent way to safeguard your business during a recession. But so is making extra money from your resources. If you own any extra space in your office or if you have any empty storage space, you can rent it out to make more money.
5. Save on Professional Development
Do you often send out your employees on seminars and mentorship programs? Or maybe you spend on getting a professional to boost the morale of your employees. Instead, consider cutting costs by guiding your employees yourself or selecting a competent employee to conduct training.
As you downsize your business due to ongoing uncertainty, the morale of your employees will be affected. You should communicate with them and assure them that the downsizing is for the good of the business.
The idea of downsizing your business is to ensure that it can survive the period of the recession. It is not to take advantage of the downturn to make unnecessary layoffs and reduce the overhead. Before you begin any step, you should evaluate and re-evaluate several areas in your business that you can adjust and identify the impact of every adjustment you make.
