10 Areas You Can Cut Costs If Your Business Is Going Through Tough Times
We are living in tough times and if you have a struggling business here are 10 Areas You Can Cut Costs If Your Business Is Going Through Tough Times.
Given that the SME sector is estimated to represent almost 40% of business in South Africa and is also a key employer, the mounting financial pressure felt by business owners should be of concern to everyone. There are also certain industries that are more at risk. “Agriculture, infrastructure and construction, manufacturing and mining, travel and tourism, retail and wholesale trade, transportation and aviation will likely be most affected,” says Rossouw.
Having a clear view on business finances and implementing conservative measures can help protect business owners from rising fuel levies. Reducing all costs by 10% as a blanket approach is worth considering and Rossouw suggests the following additional tips:
- Examine your business expenses to trim any unnecessary costs
- Review your pricing strategy (align with market or choose a niche target market which is not as price-sensitive)
- Consider doing away with any discounting
- Appoint a commission-only sales team
- Reconsider how to restructure or eliminate overtime pay
- “Right size” your staff complement
- Consider how you could decrease employees’ working hours by implementing a ‘2/3 shift policy’
- Set monthly expenditure budgets and monitor these
- Decrease your debtor’s terms
