When the United States faced its most recent economic turmoil starting in 2008, many businesses faced hardships. Some of these businesses failed to survive. While the economy is seeing some recovery since then, many businesses are still met with adversity. To keep their businesses in operation, many of the owners are forced to explore a number of different options. These measures can ensure the survival of their company.
Broaden Your Business Scope
For some companies that operate in a niche market, it may be best to broaden your scope of business. Evaluate the equipment and materials you have available to consider other possible options you can pursue. Should you need to hire additional help or purchase additional equipment, these expenses should be considered before you move forward.
Sell Unused & Underused Equipment
Machinery and equipment is a large expense for any business. Inventory the equipment you have to ensure it is presenting value within your business. If equipment is going unused, consider releasing it for sale. In order to cut costs of buying new machinery, many companies are seeking used construction equipment for sale.
Partnering For Savings
Many of the companies with which you conduct business will be facing the same industry specific issues as your company. Meet with suppliers to negotiate a cost reduction in exchange for your exclusive business. This should be particularly effective if you have a regional sales representative. The same exclusivity agreement can be offered to your clients in exchange for your reduced cost.
Rent Unused Space
Facility expenses can be the bulk of business expenses in construction related industries. Lighting, electricity, temperature control, and machinery all consume a large portion of operating expenses. In many facilities, there is additional space that goes unused. Offer to rent out space to area trade smiths. The amount of space you allow and scope of rental is dependent on your needs but can offset some of the daily operating expenses.
Subcontract Rather Than Employ
Situations will occur where you have a surge in incoming business and you may need to seek the help of additional hands within your staff. Rather than hiring on an additional employee that you may not be able to keep employed, hire an experienced subcontractor. Employees often come with many additional overhead expenses, such as workman’s compensation, insurance, and other benefits. By using a subcontractor, you can hire additional help with the knowledge that the position is being offered temporarily. Should a new client present a continuous stream of income, the subcontractor can then be hired as an employee.
Encourage Employees To Assist
Seeking new business can be time consuming and difficult, particularly when you closely handle the daily operations of your business. Encourage employees to seek new business options. Should they successfully locate a new source of income, employees should be rewarded with a bonus. This can be facilitated in a specific amount or a commission.
Any options should be carefully considered before you move forward. The idea is to find what works for your business and proceed accordingly. Some options will not be best suited for your company, however the option to reduce expenses is more readily available than you may think.
Article Submitted by James Kelly.