In the wake of the health crisis, it has become crucial to review expenses and eliminate items that are not essential in order to avoid cash flow difficulties. As an entrepreneur, you must dissect your company’s fixed costs. In that respect, here is what you should look at to save money…
What are fixed costs?
Fixed costs include rent, monthly or annual subscriptions, salaries, etc. If you do the maths, you’ll find that they add up to a significant amount over a year. It is advisable to limit yourself to what is strictly necessary by being satisfied with the obligatory expenses without jeopardising the smooth running of the company.
For instance, when it comes to the premises, it is possible to go for your own house in order to make savings. Otherwise, business incubators are also accessible at a good price. To furnish your premises, it is wiser to invest in second-hand office equipment. They are more affordable than new equipment and can help you save up to 50%.
Teleworking: an effective way to cut costs
Renting an office can be a big budget-breaker. If possible, ask your employees to work from home to completely eliminate this expense. Similarly, only recruit the staff members you need at the start of your business and as you go along, you can expand your team according to your real needs.
Furthermore, it is strongly recommended that you digitise your system so that you no longer have to print out order forms and invoices thus be able to process your data more efficiently. In addition, there will be no risk of duplication. This is also the best solution for teleworking as the data will be updated in real time and accessible at any time and anywhere.
How to save on subscriptions?
After several years of various subscriptions, you should review your contracts. With a good negotiation, you can benefit from a preferential rate on the different bills (internet, telephone, etc.). For electricity, think about replacing the most energy-consuming items and using energy-saving lamps. This may also be the time to cancel some subscriptions that you don’t need.
Also, be aware that overstocking is costly; study your needs and adjust orders according to results. However, beware of running out of stock, as this can damage your brand image. Finally, when organising business trips, look for low-cost services and take the time to compare prices to find good deals.