If you watch the news, you won’t be shocked to hear that things could be better in the economy. Growth, when it happens, is tiny and across the country, people are turning off their boilers and tightening their belts.
But it’s not just consumers who are feeling the pinch – businesses, too, are needing to cut costs to make sure they make it out the other side.
So what mistakes does the savvy business owner need to avoid to make sure they don’t throw the baby out with the bathwater?
- Rushing into contracts – how do we make money? The easy answer is reducing costs or increasing income, right? And getting more cash in the bank requires a clutch of new clients, however it can be false economy to scrimp on your due diligence. Always take the time to make sure your new customer doesn’t have any financial skeletons in the closet you need to be aware of, and that your contracts have you covered if things go wrong.
- Risky cuts – there are elements to your business that are invisible ,so you might not see how hard they’re working. For example, your cybersecurity package might take a chunk out of your budget, but might also be protecting you from all sorts of nasties that could harm you or your clients. Your employee engagement initiatives might seem like a ‘nice to have’ but a dramatic cut could see your talent going elsewhere.
- Not structuring a restructure – It might be that you need to look at staffing levels and possibly reducing your headcount, but if you don’t manage this correctly, it could be costly in the long run. Your HR department should be able to help you avoid any pitfalls. If you don’t have HR on the payroll, outsourcing is an affordable alternative to help you navigate the choppy waters of a restructure.
- Expecting a miracle – Change often needs time to adjust to, and many businesses make the mistake of thinking they can implement a change and the staff will be able to put it in place immediately without a bedding in period. Whether it’s a new system, a change in procedure or a completely new job role, time and support should be given to help the team get used to the change so they can work more efficiently.
- Forgetting to communicate – If your staff don’t know the full story and just hear the hushed whispers of “something happening”, it could spook them. While you don’t have to, nor should you, share the ins and outs of all the company affairs, communicating clearly the information that you can will help to ease concerns and stop any rash actions, such as resignations. Again, your HR department or outsourced HR partner can support you with this.
If you’re looking at cost savings, and are worried about how you should go about it, give us a call on 01325 288299 or drop us an email at [email protected] and we will try to help you.