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It’s a horrible moment when you come to the conclusion that your business is struggling, and may indeed fail. It’s heart-wrenching to know that despite all your months or years of hard work, you just don’t know what you can do to turn things around for your company. You’ve tried everything you can think of to bring in more business, but so far you’ve had no luck. It’s time to look at this problem from a different perspective.
If you want to avoid a call to the bankruptcy lawyers, it’s time to take some drastic cost-cutting measures. Below are three ways that you can help save some money in your company budget and give you some more time to get things moving in the right direction.
Materials and utility suppliers
You probably haven’t thought too much about your materials and utility suppliers since your first founded your startup company, and if that’s the case then now is the time to start. First of all, let’s talk utilities.
Whether you work from home, have an office space for your employees, or work from a brick and mortar store, you will need gas, electric, and water. These things cost money, of course, but are you paying too much? Try using some of the price comparison websites available to see if you could be better off on a different tariff or with a different provider.
You may not think you’ll be saving much, but a small drop in expenditure will add up over time and allow you to push against the storm just that little bit longer. You should also seek to negotiate with your materials or merchandise suppliers if you have any. As with your utilities, a small reduction in your costs could be the difference between closing down or staying open long enough to land that big sale that helps to turn things around for your company.
See if there are other suppliers who offer the same products at a cheaper cost, or see if you can negotiate some sort of loyalty discount with your current provider. Many companies would rather drop their prices a little than lose your business entirely.
Expand or diversify
It could be that the reason you are struggling is that you are offering a product or service that is too niche, or too generalized. Imagine your washing machine down and water has flooded everywhere. You would immediately search for a highly rated plumber in your local area.
You would not, however, search for a handyman who claims to be a plumber, electrician, gas engineer, and window fitter. These are all specialized skill sets, and one individual would not be able to work on all of them effectively. This person is a jack of all trades and a master of none. In this scenario, you need to be the plumber, not the handyman.
On the other side of the coin, if you were looking for someone to fix your washing machine, and the plumber you rang said that they only worked on Hotpoint washing machines, which yours was not, this person would be losing out on a lot of business because the skill set they are offering is too niche. Better to diversify slightly to incorporate all manufacturers.
If after trying all of the above you still have not been able to cut costs to a manageable level or elicit any further growth for your business, it may be time to take the more difficult option. It might be time to look at downsizing.
Cutting any excess staff, moving to smaller premises, or shrinking to an online-only business, are all options to consider. You should not make this move lightly, but it is important to make the right decision for your business.
It’s never easy when your business is struggling, but hopefully, these tips outlined above will help to pull your business out of the red and into the black.