Businesses that have been around for a while now have already fully appreciated the value of regular financial planning. Whether it is done midyear or at the end in anticipation of the coming year, it provides a historical view of the business’s lean and busier months. In turn, it gives them an idea of the seasonality of fund availability, which guides them in scheduling relevant expenditures and paying off bank liabilities and government dues.
Still, no matter how constantly financial planning is done, no company is ever exempt from uncertainty. One could purchase the latest model of factory equipment to optimize production, the purchase of which could even be backed by a comprehensive business study, but it could still end up being underutilized due to unforeseen factors such as newly-passed laws that object to the use of such technology or the failure to check the availability of local spare parts and service in case of breakdown.
Moreover, a drastic economic downturn such as that which happened when the pandemic hit is always a probable occurrence. Such a large-scale event has shown how vulnerable some sectors are that they ultimately had to reduce their manpower, freeze their production, or, worse, close down for good. If yours managed to stay afloat over a year later, then great job.
Still, you can’t be too complacent. Times like these remind us that cash is a scarce commodity, but otherwise, you will need to have reserves to keep your company running and give you more leeway to claim capital allowance on commercial property assets in case your funds run low. Here are the things you can do to save money during a period of recession:
Utility costs are variable, meaning, their rise or fall depends on how productive an establishment is. A significant reduction in inventory turnover and incoming orders should alert businesses to tone down the use of utilities like electricity, gas, and water.
You can also consolidate the bills from the past half-year or so and determine the average monthly expenditure. Then, inquire from several other service providers and negotiate a cheaper deal just when your existing contract expires. It’s also worth noting that some suppliers would be glad to offer discounts for early payments or automatic deductions from your linked deposit account.
A lot is saved if only every personnel is conscious in their use of office equipment. Computers must be turned off during lunch breaks and offline meetings. Pantry equipment like coffee machines, water dispensers, and microwaves should be unplugged from the power outlet when not in use.
Other cost-saving initiatives include having everyone wear thicker clothing during the colder months to save on heating and encouraging them to charge personal devices in their homes instead of the office. Enjoining the active participation of all employees is key to garnering significant savings. It is important, though, to let them understand why they need to perform these extra measures.
The lights in unoccupied rooms must be turned off. Infrastructure-wise, you could have lights replaced with LED bulbs, which are far more cost-efficient than fluorescent ones. It will require you to shell out a big amount upfront, but this will eventually pay off with lifelong savings. Also, depending on your building’s floor area, an electric heater could save you more than a gas-powered one.
Likewise, the tap must be turned off when not in use. Although this should already be deeply engrained among employees for purposes of environmental conservation, it wouldn’t hurt to remind them from time to time. Checking for leaks in the pipework is also practical to do as undiscovered leaks not only waste a lot of water but also are the main cause of soaring water bills. If feasible in your area, consider installing a harvesting system that catches rainwater and sterilizes this for either potable or non-potable uses.
Rent is another cost you could deliberately cut by reducing your rented office space. This option is especially viable if your company has shifted to either a skeletal work arrangement or a work-from-home setup.
The use of paper can be significantly reduced by shifting from letter correspondence to email. Doing away with printing also saves you on expensive printer cartridges and electricity use. Employees should also be encouraged to share office tools instead of requesting a set of their own from the stockroom.
Saving a company from an economic crisis is not just all about preserving the wealth of shareholders but more so about the livelihoods of many who depend on it. Saving while you could is a fool-proof way of doing this.