If you run a small to medium enterprise, chances are have or will face financial instability that leads to the need to cut costs. When the creditors start looming, it is common for a business to turn straight to the obvious and fast money saver – reducing staff numbers.
However, when retailers in Australia let employees go they are not just cutting the expense of a weekly wage, they are also losing the knowledge and experience that individual has earned while working for their business. There is also the risk of damaging important relationships, such as losing the trust of your remaining staff or undoing a personal connection with a customer or supplier.
Looking ahead, when the business once again finds it feet, an organisation that has fallen back on redundancy in their time of need will suddenly be faced with the expense of rehiring and recruiting to boost staff numbers.
Rather than losing your valuable employees, here are two alternative retail strategies to reducing costs during those difficult times.
Review your expenses
If you take the time to sit down and really investigate what your business is spending money on, you may find there is plenty of room to move. Cutting unnecessary costs, such as buying too much stationery, stocking the kitchen with high-quality coffee and investing in decorative accessories for the office, can save your organisation a considerable amount of money.
Once you’ve reviewed and removed the unnecessary costs, take a look at your essential services and overheads. Even here, you could find a number of areas to cut expenses, including taking out a more affordable insurance provider or switching to less comprehensive policy.
Review your target consumer base
While it might sound crazy, sometimes cutting customers can help you become a more profitable business. If you find you’re pouring large amounts of money into retail marketing strategy that is designed to target a diverse consumer base, you may want to consider reducing these costs and focusing on a smaller audience.
This can also help make your business more efficient and could result in savings due to having to stock a smaller range of products. It’s important not to stretch your store too thin, so targeting a specific client base could benefit your business.