Profits Dipping? Here Are 4 Things to Cut Back On
With all the talk of a recession these days, it’s understandable that a lot of small businesses are feeling the financial pinch. You may be inclined to continue spending and investing as usual. However, that’s not generally the approach you should be taking for some items. We’ve rounded up 4 things your business can cut back on until your profits are back in line.
Full-Time Employee Overload
While it’s generally a great idea to have full-time employees filling your business, there can be too much of a good thing. When times are tight, part-time employees and contractors are the way to go. Since full-timers are generally more expensive, hiring lower-tier and part-time folks to get you through your rough patches is the number one place to start.
Real Estate
Many companies have opted to go remote; if that’s a possibility for your business, we suggest trimming out the extra costs that go along with renting office space and pushing your business model to that of a virtual one. But say you’re a retail space and the “remote” option isn’t actually an option. Consider downsizing to a temporary spot, or even renting out a portion of your existing space that may not be used. Restauranters may even look into the benefits of Ghost Kitchens for a quick influx of cash.
Underperformers
Few things are a bigger drag on business performance than under-qualified staff. Trimming the fat, so to speak, is necessary when dealing with declining profits. Your staff should be comprised of the highest-quality candidates—employees that truly shine and perform like rockstars. At the end of the day, you end up spending less on a few high-caliber staffers than you would bringing in twice as many lower-tier employees.
Travel
Like physical work locations, business travel has fallen to the wayside while companies struggle to maneuver the pandemic, inflation, and a recession. If there were conferences or trainings on your schedule, it might be time to cut them out and focus on doing things closer to home—or even virtually. If travel is necessary, you’ve got to be smart about it. Plan ahead to get the best deals, make sure you’ve got an itinerary laid out, and try to make these trips as quick as possible. The longer you linger, the more money you’ll spend.
Small business loans and lines of credit have long been saviors for business owners experiencing tough times. ARF Financial is known for offering larger loan amounts; longer terms; and fixed, weekly payments that make it easy to budget. Your payments even remain fixed as your sales increase. Learn more about ARF Financial and how we can help bolster your small business success.