The best way to deal with a budget cut is to not have one in the first place. Unfortunately, that’s often easier said than done. Even if you’re managing your finances prudently, you may still face an unexpected shortfall that can potentially throw your business into chaos. However, there are some simple steps you can take now to help prevent this situation from happening or minimize its impact on your business if it does occur. Here are our top tips for dealing with budget cuts.
Hire an Interim CFO
An interim CFO is a temporary, part-time employee who fills the role of CFO on an as-needed basis. They’re often brought on board when a business faces financial challenges and needs help getting its books in line.
In addition to being able to fill your day-to-day financial needs (such as balancing your books), an interim CFO can also offer advice on how you can improve your company’s overall financial position.
The most significant benefit of hiring an interim CFO is that the cost of doing so will be significantly less than hiring someone full-time. Because they won’t need benefits or any other perks provided by full-time employees, their work will be strictly confined to their hours on the clock for the duration of their contract with you.
An interim CFO benefits states like Colorado, where the startup scene is burgeoning. The state is not only home to big league players, like Google, SalesForce, and Facebook, but also tons of up-and-coming businesses. These smaller businesses need a Colorado-based fractional CFO to help them with budget cuts.
Find Ways to Work Smarter and Faster, Not Harder
You’ll need to learn how to work smarter and faster to save time. One way to do that is by using technology effectively. If a Deloitte report is to be believed, only 58% of overall work will be managed by humans by the end of 2022, and the remaining will be automated. Technology can automate many of your business’s routine tasks, so they don’t take up as much time.
For example, if you have a lot of expense reports to file, consider purchasing an accounting software tool. These programs integrate with your other software tools, such as Microsoft Word, so that all of your documents are automatically organized into a single file folder on the desktop/inbox when completed.
Improve Your Customer Service
In the business world, customer service is a big deal. Salesforce reports that 47% of customers switch to another brand after a poor customer service experience. It’s one of the first things people notice when interacting with your brand. It doesn’t matter how excellent your product is if your customers don’t like dealing with you. And while some companies have been able to succeed despite poor customer service, it’s not an easy feat to pull off.
Customer service isn’t something that can be ignored or taken for granted; it takes time and effort to improve this area of operations for any company. But the results are worth it in retaining current customers and attracting new ones.
Do a Cost-Benefit Analysis
Cost-benefit analysis is a method used by businesses to evaluate the effectiveness of their decisions. It can be applied to any number of decisions, from marketing strategies and customer relations to operations and hiring practices. By doing a cost-benefit analysis on your project or initiative, you’ll make sure that it’s worth the time and money you’re putting into it and that it will have a lasting impact on your business.
- Determine your goals: Before evaluating costs and benefits, decide what exactly you want from the new project or initiative. Is there a specific outcome in mind? What are your success metrics? Are there any deadlines? These answers will help determine whether or not something is worth pursuing in the first place.
- Calculate costs: Once you know what needs doing, figure out how much it will cost (upfront and over time). Even if someone else has already done this part for you (like when applying for funding), take some time with Excel or Google Sheets to run through their calculations yourself before moving forward.
- Compare results against alternatives: If possible, compare how much each option would cost versus its potential return.
Invest in Employee Training
The most important asset of a small business is employees. They have the skills and experience required to run day-to-day operations, but they can also be taught various new skills that will improve their performance and keep them motivated. The best way to do this is through in-house or outside consultant training. A report suggests that 76% of employees are likely to stay with a company that offers continuous training.
Your employees are your number one priority as an owner or manager because you don’t have a company without them. When times get tough, training may be one of the first things that get cut from any budget because it doesn’t directly contribute to cash flow.
Small Businesses Can Keep Costs Down With Simple Changes That Make a Big Difference
To stay in the black, small businesses should focus on making simple changes that make a big difference. For example, you can save money by hiring freelancers to fill in for employees who are out sick or on vacation. You can hire one part-time instead of two full-time employees to do the same work.
Another way to reduce costs is by doing more with less, like using cell phones instead of landlines, using social media marketing instead of traditional advertising, and buying used office equipment instead of new items when possible. These adjustments will help you take control of your budget without impacting the quality level or service provided to your customers and clients.
We hope these tips have given you some helpful ideas for dealing with budget cuts. As you can see, there are many ways small businesses can save money without sacrificing their quality of service or hurting their employees’ morale.