Small business owners everywhere are doing their best to salvage what profits they can and put some people back to work if at all possible. While the effects of the coronavirus pandemic are continuing to hurt their bottom line, few people want to have to save money simply by cutting down on the number of people they employ. After all, many managers are well aware of the fact that their employees are suffering every bit as much as they are.
A number of companies are also doing their best to adhere to new regulations and even protect their employees’ privacy. For instance, some firms have been required to test all of their staffers for COVID-19 before allowing them to return to work. Managers have been faced with new questions regarding employee data privacy when doing so. These questions haven’t been easy to answer, since many people want to strike a balance between ensuring the health of their customers and keeping people’s personal lives confidential. Fortunately, many of these guidelines are spelled out by recent orders so business owners won’t have to add additional legal costs to their budget.
That being said, personal protective equipment and other considerations are driving up the cost of doing business and those who run a small business are getting creative with ways to save cash.
New Ways to Save Money in the Time of COVID-19
Quite a few companies have asked employees to take a furlough with the promise that they’ll be retained when conditions improve. By making it clear that managers are working to avoid layoffs, they’ve been able to help staffers adjust to some of these changes. Cutting back on bonuses and salary increases is never easy, but people are often more receptive to these adjustments when they realize that they’ll be able to keep their own jobs as a result.
Decelerating pay cuts for those in the lowest salary ranges tends to be a good plan, since it helps to protect those who are most vulnerable. A good rule of thumb is to reduce the salaries of the highest paid employees by 10 percent and those in the middle by 5 percent. The lowest would only have to take a 2½ percent cut with this system. While it’s hardly ideal, it might be a good concept for companies that have no choice but to make relatively deep cuts.
Other firms are looking at cutting back on their technology budgets. Many companies have found that their IT departments have absorbed an every increasing percentage of their annual budgets over the last few years. Few of these firms want to get rid of their skilled technicians, but it’s becoming more and more difficult to deal with this kind of burden.
Cutting communication costs can be a way to reduce the amount of spending on technology without having to sacrifice anyone’s job. In spite of the proliferation of mobile phones, an average small business still spends quite a bit on maintaining individual phone extensions for each department they have. Installing a hosted private branch exchange or PBX is an excellent way to reduce hardware costs while still providing a high level of service.
PBX technology provides switching services over a network-accessible cloud storage environment. Since everything happens over the Internet, it uses far less hardware than a more traditional solution would. Those who are interested in this kind of system might also want to consider so-called BYOT policies.
Bring Your Own Tech to the Workplace
Larger Silicon Valley-type firms have cut down on hardware costs by encouraging their employees to bring their own technical solutions to work. While this might not be the best policy for those who have to maintain devices on behalf of their workforce, a BYOT system might work if your firm already has a technically savvy staff.
Managers won’t have to pay for equipment if staffers are always bringing their own with them. Some have found that their employees are more productive when working with their own devices, perhaps because they’ve custom-tailored everything to their own preferences.
Companies that annually set aside a sum of money for equipment upgrades may also wish to reassign these financial resources. Technology expenditures are often unnecessary, and there are a number of free security tools that work just as well as commercial ones. Opting to use these can save more money than you might imagine.
Business owners looking to slash budgets are now trying to apply this same sort of mentality to every aspect of their operations.
Making Small Cuts to Avoid Larger Ones
The same money-saving tips that people have been promoting for years are every bit as valid now as they were then. Most organizations have a tendency to produce too many hard copies that they don’t need. Paper and ink has gotten even more expensive since the pandemic hit, so you’ll want to take some time and rethink the way you’ve been using it.
A study from 2019 claimed that the average business goes through around 10,000 sheets in a single year. The amount of money that represents is staggering to think about.
Depending on your particular circumstances, this might be a great chance to finally push for a truly paperless office. Some may even wish to take a look at the way their invoicing systems work to see if they’re wasting a small fortune on subscription costs. Economists have opined for years that this is a major source of waste for small businesses.
Regardless of what method you take to save money, it’s important to consider staff reductions as a drastic last resort. You’ll be doing the morally right thing when you hold onto skilled employees, and you might even slash retraining costs in the process.