If economies are going to survive the impact of the coronavirus pandemic, they should start looking for ways for businesses to augment their capital and reduce business expenses. Many companies have already retrenched workers and offered shortened work hours to employees. The aim is to reduce the costs of operating a business. And as is with all businesses, reducing the number of employees that have to be paid is the number one capital-saving option.
But there’s another option that businesses fail to consider and that’s increasing the efficiency of its workforce. The more efficient your workers are, the better your chances of finishing projects on time. And you have a role to play there, too. As employers, you have to make sure they are happy, contented, and safe in their offices. Simply having the offices cleaned with microfiber rags and sanitized with UV machines will go a long way toward reducing absenteeism.
Reducing Business Expenses as Key Issue
The key issue for many businesses right now is how to expand their profit margin. They can do that in two ways. The first one is to produce lower quality products with cheaper ingredients or supplies. The second one is to reduce the cost of running the business. For many companies, of course, sacrificing the quality for which they have been known for is a no-no. So, what’s left is finding ways to reduce business costs.
But before getting to the nitty-gritty of retrenching workers and optimizing processes, employers need to look at how to boost their workers’ efficiency rate. Why does this matter? Because this is the crux of how to lessen your business costs. The more effective your workers are, the less you need to hire more people, invest in technology, or partner with third-party providers.
Eliminate Time-consuming Admin Tasks
If you’re one of the companies who needed to retrench some workers, then it means those who are still with you now will have to take on more responsibilities at work. People are generally happy to serve their employers for fear of losing their jobs right now. But, this is not a reason for you to take advantage of them. What you can do is to demand them to be more efficient in doing their jobs. That alone will reduce the administrative tasks associated with running a business.
If you can be your own bookkeeper and accountant, you won’t need to pay for those services anymore. However, make sure you can file the appropriate tax documents correctly. You might have saved on business expenses, but tax violations are serious.
Being efficient doesn’t only reduce business expenses, but it also boosts profits. Because processes are now streamlined, you have more time to create new products that will appeal to your target market. You can fulfill larger orders. This way, you’ll be making more sales than usual, too. This will have a significant effect on your profit margin since you’re spending less than what you’re earning.
But before actually increasing revenues, you have to find better suppliers. This is the best way to increase your profit margin—by finding suppliers that offer the same quality materials for less the price than your current suppliers. Again, your procurement unit should always be on the lookout for better and more affordable suppliers. Should you still remind them about this? Not if they know what they have to do to keep the business afloat.
Make New Investments
Because you have fewer expenses in producing your products and services, you’ll have the extra money you need to make new investments. This will allow you to enter new markets, follow trends, and help your current business grow. Creating buffer in your finances will open opportunities for growth for your business. Not only can you invest your money anew, but you will also forge new paths for your business to take.
Meet Consumer Demands
Your consumers want the best quality products they can afford. They expect nothing less. An efficient staff knows how to go about meeting these demands. The ability to rely on the efficiency of your staff is the kind of privilege few businesses have. This efficiency will have your staff meet the demands way before they are made. They can also effectively respond to urgent and unexpected orders.
This is not the first major economic downfall that you’ll have to face as an entrepreneur. That’s why businesses need to be prudent with their expenses. It’s critical for businesses—small, medium, or large—to hire the right people who can become effective ambassadors of their brands.