Business Strategy

How to Prevent Layoffs by Reducing Expenses

Running a business can feel like a constant game against the numbers, trying to make your bottom line as appealing as possible. There are all sorts of ways that business owners can go about doing so, but one of the most common ones is trying to find ways to cut costs and squeeze every dollar out of the budget possible. Unfortunately, this can result in employee layoffs, which are not good for your employees, your business, or your customers. Here is how to prevent layoffs when you need to tighten your budget at your business.

Cancel Recurring Monthly Expenses

The first thing that you should do to prevent layoffs when you need to tighten your business budget is to cancel your recurring monthly expenses wherever you can. Just like in your personal budget, you may have things in your business budget that are recurring, membership type services that cost you every month and provide some sort of service. Not all these services are essential to your business. You should cut every single monthly expense that you can that doesn’t provide sufficient benefit to your business. By doing so, you can often save an entire salary in your budget, preventing a layoff.

Cut Waste

The next approach you need to take to avoid layoffs when tightening your budget is to cut out all waste. Your business cannot afford to leave wasteful spending in place while cutting jobs for your employees. There are several types of waste you need to be mindful of in your business. Look out for waste in areas like supply chain, inventory, morale boosting activities, and catering. These areas can and should be cut first and you need to find the most cost-efficient way to keep the essential functions of your business operational.

Reduce Your Printing Expenses

Printing may cost up to three percent of annual revenue and be the third highest expense after payroll and rent. According to a Buyer’s Lab survey, 90% of the companies do not track their printing costs, making print inefficiencies and related labor, consumable and vendor costs a hidden drain on budgets (learn more in this article on shocking statistics about printing cost). By setting up a managed print services program through Offix, you can reduce your operating cost by up to 30%, and continue improving on your print processes costs.

Review Your Vendor Contracts

The final thing that you should do to tighten your budget without layoffs is to review your vendor contracts. Look through all your contracts with suppliers, vendors, and distributors, and make sure that you are getting the best deal possible. Don’t be afraid to shop around for your vendors and suppliers and distributors, it is business after all. Protect your employees and fire your suppliers first.

There is no easy way around a tightening budget at your business. But if you want to avoid layoffs while shrinking your budget, there are ways you can do it. Try these three strategies to tighten your budget without resulting in layoffs.

Read this next: How to Avoid Micromanaging

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