Whether we care to admit it or not, there comes a time in every business where you start to feel the pinch. When you are running low on cash you start to look around at things you can cut from your budget. Be careful when you’re making cuts though – decisions you make during lean times will affect you when things get better. We’ve talked before about smart ways to cut costs, today we’re going to talk about how to avoid common mistakes in reducing expenses.
- Cut Hours, Not Employees – Sure, this isn’t likely to make you anybody’s best friend, but your employees would much rather get a reduction in hours (or even a reduction in salary) than get fired outright. Bear in mind that layoffs take a toll on employee morale, reducing the productivity of the employees you do need. When your cash flow does improve, you can just provide more hours to your already-trained employees, and can skip the time-draining process of training a new hire.
- Keep Customers Happy – When times get tough, it may be tempting to reduce the amount of money spent on services provided to customers – but it’s your customers that are going to bring you back in the black. Find places that customers will not notice to trim your budget (changing your credit card processor, renting cheaper/less equipment, etc.), and keep your customers happy!
- Don’t Stop Marketing – Marketing your business during down times may seem like an extravagance, but it’s the only way to make sure your name is still on everybody’s minds. Since customers are choosier than ever during economic slumps, advertising can make a bigger impact than ever.
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