The global economy is faltering. Small businesses need to be quick to react. The twin engines of global economy – the US and China – are slowing. As the Brexit talks go down to the wire, the UK economy is stalling. Italy has tipped in to recession. Small businesses are often the first to feel the chill winds of an approaching economic winter.
Here are five simple ways you can make your small business more financially resilient:
1. Go green
Becoming more ecologically conscious can be a great way to cut costs. This could involve switching to LED bulbs, installing a smart heating thermostat, or simply turning down your existing thermostat by a degree or two.
Going paperless doesn’t just save on paper. It also saves businesses on printers, toner, postage, filing cabinets and office space. Ask staff to use email whenever possible. Some still think documents like contracts need to be printed, signed and posted. Yet most contracts can be signed digitally and exchanged electronically.
Switching off servers and computers at the end of the day is a simple way to reduce your carbon footprint. If people keep forgetting, use timers. Make sure monitors and devices are set to their most eco-friendly settings. Motion sensors can ensure lights are only on when needed. When buying electrical equipment, pay attention to the energy rating.
2. Hire flexibly
Hiring contract and freelance workers can bring a wealth of benefits to businesses. Staff numbers – and skills – can be rapidly tailored match to work flow fluctuations. Offering flexible working conditions can help with staff retention. Remote working can reduce the amount of office space you need.
In an uncertain economic environment, using freelance and temporary employees can prove a valuable advantage. SMEs can take on temporary staff to complete ambitious contracts, without over-committing financially for the long term.
Think outside your time zone. When completing a project to a tight deadline, a software developer in Delhi can get the job done while you sleep – often for a fraction of the cost of a local developer.
3. Automate your admin
Payroll software can radically reduce admin costs, facilitate supply chain management and help ensure that companies are both tax compliant and tax efficient. The administrative burden of taking on new staff is reduced: Hiring freelancers is a breeze when you have the right software. The right technology can help your business become more adaptable.
In the age of Alexa, Siri and Cortana, virtual assistants are part of daily life. Voice recognition can mean that typing services are no longer required, as lengthy documents can be drafted by voice.
Your marketing and social media presence can also be automated. Software exists that provides cross-platform integration, analytics, content management and customer targeting. Social media posts can be timed for maximum impact across multiple platforms.
4. Share office space
Rent is often an SME’s biggest overhead. An increasingly popular solution is using a shared office space. This could involve moving to a co-working environment such as WeWork, Work Life or The Office Group.
Alternatively, businesses can team up with one another to hire an office space that can house multiple companies under one roof. This also means businesses can share costs such as heating, cleaning, printing and reception staff.
5. Shop around
Reduce your monthly overheads by shopping around for the best deals. While price comparison websites can help reduce utility and insurance costs, don’t forget to look for better quotes from suppliers such as software providers or accountants. A quick email sent to a few competing firms could yield significant savings. Even if you want to stay with your current provider, a better offer from a competitor could produce a fruitful renegotiation.
The costs of banking and finance should not be overlooked. Refinancing loans to lower interest rates can yield substantial savings.
Taking simple steps to reduce costs will help you adhere to that most elemental law of business: earning more than you spend.
Julian Pilling, CEO of Solutio