Long ReadFeb 14 2023

Quick ways to cut costs for your business

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Quick ways to cut costs for your business
(FT Money)

While the cost of living crisis piles pressure onto everyone, small businesses carry the biggest burden.

Soaring overheads and reluctant consumers paints a dismal picture for many SMEs, who are still recovering from the Covid-19 pandemic.  

If you, or your client, urgently need to create financial breathing space, here are some quick wins you can introduce within your business.  

Offer voluntary flexi work 

Reducing staff hours means a lighter payroll and, potentially, a better work-life balance for your employees.  

Before you consider enforcing reduced hours, see if any of your employees are interested in working fewer hours. It could be that your employees already want to work less.  

Here are some flexible working options that could reduce the amount of salary you pay: 

  • Job-sharing – where two employees do one job and split the hours between them.  
  • Part-time hours – working less than full-time hours, usually by working fewer days. 
  • Phased retirement – where your employee starts to reduce their hours ahead of their retirement.  

Sharing a flexible working policy shows staff how they can reduce their hours in a way that suits them.  

Review everyone’s role  

A downturn in the market represents an opportunity to conduct a root and branch review of everyone’s role in the company, whether you employ five people or hundreds. Are their positions still relevant in the current climate? Can they be moved into another more suitable role where there is duplication? Are they pulling their weight?

Some perks are more costly than others. And often, the best staff perks are free.

Use tough times wisely and take a good look at everyone’s performance. And remember it is vital to take expert advice if you do decide roles need changing or redundancies need to be made to cut costs.  

Reduce energy waste 

According to the Energy Saving Trust, the UK wastes £170mn a year by leaving the light on in empty rooms. Installing a timer system means you never leave lights on for longer than necessary or forget to switch them off.  

Plus, even when equipment is on ‘standby’, it still uses up energy. So it is important to remind employees to always switch off electronic devices fully.  

Having a dedicated policy means you inform staff how to cut back on their energy use. This can include rules around: 

  • Switching off appliances. 
  • Printer usage.  
  • Using natural light where possible. 

Allow staff to buy more annual leave 

Giving staff the chance to buy extra holiday – above and beyond their current entitlement – allows you to raise extra funds.