Your company is probably going through many unprecedented changes amidst the coronavirus pandemic. You’ve probably had to lay off workers or temporarily shut down services. One of the first instincts is to cut costs; however, the cuts can be made in the wrong places, or go too deep. Here are some rational ways that your business can reduce its expenses.
Pricing
This is the perfect time to ensure that your pricing is up to date. Some companies may find that they’re using out-of-date pricing that results in reduced margins. However, to avoid any concerns with price gouging, you should never change prices during a national emergency, such as COVID-19. But, do take advantage of this time to look over your pricing carefully, and make changes where needed.
Inventory
When it comes to your inventory, there are many ways that you can cut down on unnecessary supplies:
- Check to see if there’s any inventory that is unnecessary and can be returned to your supplier.
- Use universal parts that can be used on different brands of equipment.
- Write off any old inventory that you may have (i.e., use it as a tax shield).
Vehicles
- All company vehicles should receive an oil change every 3,000 miles along with scheduled maintenances every 30,000 miles to avoid any problems later down the line.
- Everyone who drives a company vehicle should take a defensive driving course to save more on insurance.
- Try to lower your auto insurance premiums by paying semi-annually or annually.
Phone Carriers
- Review mobile phone contractors for possible savings, and even look into the possibility of new carriers.
- Use a voice over Internet protocol or VOIP phone system. They are more functional and tend to cost less. Also, they can be used from any location with internet access.
Employees
- Be open with your employees — share company financial information to keep them aware of the need to generate more sales and cut costs.
- Implement incentive pay. Use performance pay for technicians and full commission pay for salespeople.
- Before deciding to lay off employees, consider offering reduced office hours.
