The world is still an uncertain place to be a small business; with the world economy in a fragile state, it is more important than ever for small businesses to be savvy and cut costs wherever they can.
The best way, as far as I am concerned, to tighten your business belt is to substitute fixed costs for variable costs within your company. What I mean by this is to change, where possible, costs that you have to pay each and every month regardless of whether your business is making money, to costs that you only have to pay when your business is making money. Does that sound impossible? It really isn’t so hard if you begin to think outside of the business box.
The easiest area to change fixed costs to variable cost is in staffing. If you need someone to do your business’ marketing for you, why employ a marketing team when, if you choose to outsource these tasks, they can become variable rather than fixed costs.
This same mentality can be applied to nearly all business roles; some businesses think that outsourcing risks their business integrity or can compromise customer service – but if you choose your freelancers or home businesses wisely then this is completely avoidable.
When looking to cut your business costs this way it is essential that you give clear direction and instruction to the people you are outsourcing too; and make sure that all of the tasks can be monitored. Keep up to speed with what your team are doing, but try not to micro-manage as this completely defeats the point!
Working with freelancers or home businesses not only keeps your business costs flexible, but also helps the economy by driving small business and entrepreneurship in our communities. Working in this way means that everyone really is a winner!
Disclosure: The author Stefan Töpfer, Fellow IOEE, is CEO of WinWeb.com - a leading cloud based small business infrastructure provider (small business software, e-Commerce solutions & business process outsourcing) - the views and opinions expressed are his and are based on over three decades of personal experience as a serial entrepreneur, #1 small business blogger, mentor and angel investor in the SME/SMB sector.