Business budget cuts are a fact of life these days. A business suffering in this scary economy is sometimes forced to make choices concerning budget cuts. There are cuts that can be positive for the business. There are also business budget cuts that should be a last resort. The following are my common sense suggestion for businesses faced with the difficult task of cutting the budget.
Use free online services in place of expensive business software.
Most programs needed to run a business have free alternatives. Try Open Office instead of an expensive word processing system. It’s not fancy but it is free. Even computer security can be obtained for free. Check out Avast for details. Even tax help and bookkeeping programs are free for some businesses. Budget cuts don’t have to be scary. Do a little research and see what the business is paying for that is available for free.
Bartering with other businesses for goods and services keeps costs down.
This makes other budget cuts decrease. Think about what you could provide another business whose supplies or services you need. For instance, if you are in the newspaper business, you might offer to run a free add in exchange for a discount on printing ink or paper. These type of budget cuts can save plenty on operation costs.
Set a fair price.
Don’t cheat yourself or employees by not being paid what you are worth. This one decision will avoid actions like budget cuts from the start. When setting a price, take price increases and profit drops into consideration. Bid jobs with the worst case scenario in mind. Always have a margin of error worked into the price to avoid budget cuts.
Be aware of power usage.
Turn computers and other power draining devices off at night. Unplug them if possible to cut power usage down. Save the budget just as you would at home. Using compact fluorescent light bulbs cuts costs in a business too. Look into occupancy motion sensor lights. Budget business energy costs wherever possible. Cuts like this are good even in prosperous times.
Don’t discount your employee’s worth.
These people were hired for their brains. When facing financial crisis, hold a meeting. Have each employee come up with ways to make budget cuts without cutting people or salaries. I guarantee these people will come up with a wide variety of budget cuts. Do away with perks when making budget cuts, but leave salaries and insurance as is.
Avoid cutting salaries or implementing layoffs if at all possible.
Dedicated long term employees are the best resource of any business. Many businesses today make the mistake of laying off veteran employees that know what they are doing. New employees may be cheaper for the budget, but those with seniority have invaluable expertise in operations. These people have been supporting the business for years. This is not the place to make cuts.
Don’t forget the small stuff.
Things like office supplies, packaging, postage and such will add up quickly in any business. Consider cuts in paper quality. Buy supplies in bulk. Re-use packing materials. Use e-mail for everything possible to avoid unnecessary postage. Watch for sales on business supplies, just like you would in the home. These budget cuts are painless and can make a big difference to the bottom line.
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