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2020 was a challenging year for the majority of business owners. After months of lockdowns and a struggle to stay afloat, many company owners are starting 2021 with a battle on their hands. If you run a business, and you’re looking to boost your balance in the months ahead, this guide contains useful information and tips to help you reduce expenses and increase your income.
Staffing costs
Paying wages accounts for a significant portion of the outgoings posted by most companies. Whether you have a small business or a large-scale corporation, it is likely that you’re paying out a substantial sum in salaries or staffing costs. Some organizations have grown during the pandemic, but others have found it difficult to stay above water. If your income is dropping, or you’ve had to scale back operations due to Covid-19, it’s advisable to take a good look at the current staffing structure you use and explore some options that may be open to you. Flexible employment arrangements can often save businesses a huge amount of money. If you don’t have staff on fixed, permanent contracts, speak with them and see if you can come up with ideas that are mutually beneficial. Some employees may be willing to reduce their hours, some may want to work remotely more frequently and some may even consider taking voluntary redundancy. If you run a seasonal business, it’s always beneficial to offer short-term contracts to boost numbers during peak periods and save money during quieter spells. Business owners can also take advantage of the cost-saving benefits of outsourcing. Outsourcing offers an alternative to hiring employees on a long-term basis. Whatever decisions you make, it’s vital to communicate with your employees and to ensure they know where they stand. You must also act in accordance with employment regulations.
Real estate costs
Some entrepreneurs rent business spaces, while others own their business premises. If you rent a store, a warehouse, an office or a space for hospitality services, 2020 may have caused your requirements to change. The outbreak of Covid-19 triggered a mass exodus from offices and other communal workspaces, prompting millions of people to start working from home. In light of the situation, many employers are paying rent on offices and retail units that they are not currently using. While there are measures in place to support business owners, it may be advantageous to think carefully about whether you would like to continue or renew your lease once the term comes to an end. Do you need an office? Are you paying for an exclusive zip code or address when you no longer need to? If your employees are happy working from home, and the switch hasn’t affected operations or efficiency, you could save a fortune by swapping to a remote workforce. If you need meeting areas or a business address, you could consider a virtual office. If you still want to have a base, but the location is no longer critical, moving out of town will save you money.
If you own your business premises or your own land, there may be ways to earn money from the plot. You could also consider selling up or putting the space up for rent if your needs have changed. Before you make a decision, weigh up the pros and cons and think about your requirements. If you have a remote workforce now, and you wish to continue once measures are relaxed, you could sell the premises or offer the space to a tenant. It’s also important to be aware of factors such as cell tower lease. If you own land, and a company wants to use a cell tower on that plot, research average lease rates for cell towers and consider hiring an expert to represent you and help you get the best price. You may also be able to generate an income from your land by renting out individual areas, such as office space or outdoor buildings for agriculture or storage. If you don’t want to keep hold of the premises, there is also an option to sell. If you’re developing and expanding your business with a different working model, you could reinvest the funds.
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Tapping into new trends
There is no doubt that the Covid-19 crisis has shattered some industries, but it has also opened doors. If you operate within a sector that is struggling, or you’re looking to capitalize on the opportunity to grow your business in 2021, look out for emerging trends and try and adapt and adjust to generate new income streams. The demand for certain products has soared, for example. If you start producing items or offering services that are in demand, you could recover losses or add to profits. Analyze sales figures, look at what consumers are buying and think about how you could modify your business model or the product ranges you offer to attract customers and replace items or services that may not be as popular as normal. An example is home fitness. More people are working out at home than ever before. If you have a clothing brand, explore the possibility of expanding your collection to offer activewear and gym gear. It’s also a great idea to offer loungewear and pajamas, as people are spending more time at home. If you usually develop products like gadgets or household items, you could start working on ideas for home gym equipment. With any new product, it’s crucial to undertake research to gauge the level of demand, get an idea of what kinds of products are already on the market, analyze price points and gather information about your target buyer.
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Many business owners will be starting 2021 with the aim of staying afloat and trying to turn their fortunes around after an incredibly difficult year in 2020. If you’re on a mission to improve your financial situation, it’s beneficial to focus on reducing expenses and increasing your income. Analyze your finances, look for areas where you could make cutbacks, and try and boost sales by capitalizing on new trends.