How to Bring Down Business Expenses without Cutting Jobs
October 27 2019 - Letting employees go to cut down on business expenses is never an ideal situation, but at times, the decision makers are left with no other choice unfortunately. In spite of what most employees may think, such decisions are really the ones that management only make when they truly have no other option, since it is a huge loss in their productive capacity as well.
However, it isnít uncommon to see that more often than not, the management is simply failing to explore other avenues of cutting expenses, which would let them reduce the loss of employees to an extent. Some of these decisions need to be made in advance, while others can be reactive. Here are just a few ideas.
Planning Ahead of Time: Be Clever While Buying Your Machinery
For most SMEs that operate in segments like recycling, manufacturing and construction, where huge and expensive machines such as cranes, mixers, forklifts, balers, drill presses, etc. are necessary, the cost of that equipment is the biggest expense that they have to bear.
Be clever about it from the beginning and only buy high quality, second hand equipment, or maybe just rent them out for the project at hand.
In case you are in the recycling business, renting is not a cost-effective option, so go to recyclingbalers.com and get an adequately sized baler and/or compactor at half the price of the original, if not less! Itís a great place to sell any old, useless machinery that you might have lying around as well, which will give you more funds to work with.
Discuss a Salary Cut with Your Employees
Everybody hates such meetings, but the question is, if the management is clear about the companyís present situation and it explains the same to all the employees, will they choose to keep their jobs at a lower compensation, or would they rather lose their jobs outright?
If a company does take this route, they need to be absolutely transparent about it, and the biggest cuts need to come from the higher-ups first. Otherwise, a salary cut will simply make employees feel like their wellbeing is sacrificed in order to keep the business profitable for the owners. The message that this is a sacrificial step on the part of the management to save jobs for the workers should be clear.
Cutting Down on Office Expenses
What if there was a way to skip the office rent completely? Well, thanks to the internet, there isnít just one, but multiple ways to do so! Of course, it isnít a possibility for a lot of segments, but for consulting, marketing, law firms and various other types of businesses that donít exactly require a huge office, a well-connected, cloud-synced, virtual office environment, coupled with a small reception office should be enough to both cut down on rent and maintenance costs massively.
Unfortunate as it is, sometimes a downsizing is necessary for the business to stay afloat, but that doesnít mean the higher executives should not first try and hold on to as many of the key employees as possible. Hopefully, some of these tips will help you do the same for your own employees as well.