With inflation on the rise—along with expert warnings that the U.S. could be headed towards a recession—many business owners are trying to cut costs so that they can better financially prepare for whatever comes their way. But in the rush to save money, you might slash items or services that can wind up hurting your bottom line in the long run. Before you cut any business expenses, check out these tips from business and finance experts.
What You Should Cut
If you have more office space than you need, consider downsizing or subletting a portion of it, says Max Shak, founder/CFO of Survival Gear Shack.
Yes, it is important to advertise your event planning services, but thanks to social media, you no longer need to spend money on printing and mailing costs.
Unless it is necessary, you might want to cut back on travel expenses, especially if it involves expensive airfare and hotel stays. For example, while conferences and press trips are great for networking, you don’t want to overextend yourself by spending too much on out-of-town trips.
Unused or unnecessary subscriptions
Shak suggests taking a look at your business subscriptions and seeing if there are any you can cancel or downgrade. When these expenses are auto-paid each month or year, it can be easy to forget they even exist.
Reducing energy and water usage can significantly lower your business's utility bills, explains Edward Haris, CEO, and founder of Phoenix Review. With that in mind, install energy-efficient lighting, use programmable thermostats, and implement water-saving measures to reduce costs.
Do you really need all that paper, pens, and Post-it notes? Check bulk orders carefully to see where you can save.
Outsourcing can be a cost-effective way to handle certain tasks, but it can also be expensive. “Evaluate your outsourced services and consider bringing some of the work in-house or negotiating lower rates with your vendors,” says Haris.
What You Shouldn't Cut
This is definitely something you don’t want to skimp on, says Wishine Ali, CEO/Founder of Best in Ottawa. Make sure that you have adequate insurance coverage to protect your business from potential lawsuits or accidents.
From AV equipment to software solutions (like Aisle Planner!), staying up to date on the latest technology will keep your business efficient. And an efficient business is a profitable one. When times are tough, competition is even higher so being able to set yourself apart from others pros is pivotal. Now is the time to lean into services, like Aisle Planner that ensure you have the most comprehensive and streamlined technology by your side. Check out How to Market Yourself as an Aisle Planner Pro!
Speaking of technology, you want to keep your business safe from fraud and scams, so it’s imperative that you have cybersecurity measures in place. Failing to do so can cost you big money.
Event planners should always ensure that they have adequate security and emergency response plans in place to protect attendees and staff.
As Shak notes, customers are the lifeblood of your business, so it's important to maintain high levels of customer service.
Employee compensation & benefits
Research shows that happy employees are more productive. Cutting salaries and benefits will lead to less productivity and ultimately the loss of staff.
Legal & accounting services
It's important to have proper legal and accounting services in place to protect your business and ensure compliance with regulations, says Shak.
Training & development opportunities
Skilled workers are a significant asset to your company, therefore limiting these possibilities can have a negative impact on morale and production, explains Andrea Smith, CEO and Founder of Master Manchester.