The Top Cost-Cutting Tactics Small Businesses Can Use That Don’t Hurt Growt

When recession sets in, most small business owners want to hibernate: freeze, cut headcount, slash marketing. Yet such reactionary cuts can halt growth or, even worse, ruin long-term viability. It is not enough to cut costs.

One must do it strategically so that his business will remain nimble, lean, and poised to grow even during hard times. For example, the use of RFID for warehouse inventory or other vital subscriptions can work towards reducing the overhead cost.

The following are some of the clever, low-risk, cost-cutting strategies that will safeguard your bottom line without affecting your capacity to develop.

1.      Audit and Eliminate Redundant Products and Software Subscription

As time goes by, companies end up with redundant SaaS applications, paid plug-ins, and licenses that pile up. Most teams are often guilty of maintaining several platforms to accomplish similar tasks, such as project management, time tracking, and file storage, without realizing the hidden cost.

Begin by conducting an audit of all the active subscriptions. Find those tools that are not used fully, provide similar functionality, or may be substituted with a free or lower-priced version.

2.      Prepare for Remote or Hybrid Workflow To Avoid Overhead

The rent of an office, utilities, and office maintenance can become a cash flow drag-- particularly when teams can operate remotely. When your business can stay the same or even increase productivity offsite, a switch to a remote or hybrid model can save tremendously on real estate and utilities expenses.

There are also options for co-working spaces or flexible leasing agreements when you need to meet in person occasionally.

3.      Negotiate With Vendors and Service Providers

Vendors usually become more flexible in their terms during recessions. Your internet service provider, office supply company, marketing firm, or software system - whichever it may be - can pay to renegotiate a lower price, longer payment terms, or a bundled discount.

It is ok to inquire. Note your loyalty or usage history and discuss mutually beneficial possibilities.

4.      Try to Automate the Repetitive Tasks

The human duties, be it invoicing, posting on social media, or onboarding customers, are time-consuming and take away the hours needed to focus on growth. Spend on inexpensive automation devices to take care of recurrent tasks in finance, marketing, HR and operations.

Zapier, Mailchimp, QuickBooks, and HubSpot have automation features that are friendly to small businesses and grow with you.

5.      Train Core Employees Across Multiple Roles

Rather than recruiting more employees when times are tough, search internally. Train current staff to wear multiple hats - marketing + support, operations + inventory, sales + account management.

Not only does this create more flexibility in your team, but it also beefs your bench in preparation for growth.

Why it works: You get the most out of every team member and minimize the necessity of new hires at the expense of neither service nor output.

6.      Follow the Lean Method in Inventory and Supply Chain

Excessive inventory puts cash to waste. Rather, consider just-in-time inventory schemes, more intelligent demand prediction, and more frequent cooperation with suppliers to drop-ship or order in smaller batches.

Invest in inventory control resources (such as RFID solution systems or built-in POS systems) to enhance stock management and prevent over-ordering.

When you operate lean, automate smartly, and focus on efficiency, your small business will not only be able to survive any economic downturns, but it will also be stronger and prepared to expand.