Expenses You Don’t Want to Cut — Even in a Crisis

Let’s agree that it’s one of the most important tasks nowadays. You don’t want to lose or compromise none of the following:

• Financial statements;
• Inventory;
• Salaries;
• Personal data of employees and clients, etc.

If this data is compromised, you are facing a real disaster. Recovering costs are definitely bigger than preventive measures. Sometimes you can even look at the irreversible damage — that’s why economic and cyber security isn’t something to save on.

If we are talking about a crisis, the most important resource you have to go through it is your employees. It’s your responsibility as an owner of the company to lower the level of anxiety and invest in human resources.

It’s not as much about salary as about corporate training and career enhancement. Another way to motivate your people is with different perks. It makes employees feel important and cared about. For example, you could organize group workout classes for the team. It’s less expensive than paying for the individual gym cards and boosts team spirit.

Even though salary might not be the priority in this case, it’s still of crucial importance. You could consider bonuses for ideas on how to:

• Implement resource-saving technologies;
• Optimize business processes;
• Boost industrial efficiency.

Remember that in this case your employee saves you more money than you are giving them as a bonus.

Well, you’ve paid bonuses for the innovative ideas. It won’t be a waste only if you actually implement new technologies. It brings us to the expenses for reorganization and renovation of the business.

Who says no to the development and growth? Especially if we are talking about the crisis. It’s the best time to make some organizational changes, rethink corporate culture, and figure out other points of growth.

It’s common for the companies to cut marketing expenses when facing unstable economic situations. However, if there are no plans to shut down the business, it’s of crucial importance to develop new products and services, produce them, and conduct marketing research to launch.
Crisis is the time of the opportunities. Where one company shuts down, another pulls some money in, estimates the market and takes business to the next level.

Challenging economic situations make businesses cooperate to solve problems more efficiently: for example, reach out to new suppliers or customers. This requires organizing or joining industry unions, associations and clubs.

This king of community offers several advantages, For example, companies can purchase raw materials together, which might not be affordable without help. The only significant con is that it requires a coordinator who would invest time and energy to bring the businesses together.

It can’t be done automatically. Businesses need to focus on manual control, where the feasibility of each payment and the effectiveness of all costs are examined individually. Management needs to learn how to balance current needs and strategic objectives.

If you want to survive a crisis, there are several things to pay attention and:

1. Reduce expenses and irrational costs.
2. Increase economic efficiency of all costs, resources and investments.
3. Increase the revenue and marketing activities.
4. Find alternatives to replace cost-intensive solutions with low-cost options.
5. Improve internal systems (production, logistics, HR and others) and optimize business processes.
6. Find new fundamental solutions for economic activity. Even a paradigm shift in business cannot be ruled out with this approach.

Crisis is always a huge challenge for a company. But at the same time, crises also lead to the discovery of new technologies or even systems of work organization.

For example, 3 years ago working remotely used to be rather unpopular. But the pandemic changed the situation on the market — companies started to attract specialists from other regions and countries to solve problems. This solution has strengthened the business with suitable employees and reduced the cost of renting premises.

A potential new crisis could also be a source of progressive solutions that businesses don’t normally look for.