It can be tough to make ends meet when your business is hit with hard times. It seems like every penny needs to be accounted for, and any unnecessary spending must be cut. But while there are some expenses that can safely be trimmed during a recession, there are others that should not be touched under any circumstances. Here are six of them!
Advertising – The first expense you should not cut is advertising. It may seem like a luxury, but effective marketing is key to keeping your business afloat during a recession. Do dig into the metrics to identify what is working and what is not so that you can focus your investment. If you haven’t been tracking in the past you must begin now.
Sales – The second expense you should not cut is sales. Your sales team is essential to keeping revenue coming in, so it’s important to invest in their success. While it might sound like a good idea to restructure compensation plans, cap commissions or cut incentive programs you are probably shooting yourself in the foot. There is always a market for great salespeople and you don’t want yours leaving. Do keep tight control on performance and monitor the leading sales indicators with vigilance
R&D – You should also think twice before cutting back on research and development. It may seem like a frivolous expense, but investing in new products or services can help you stay ahead of the competition. And during a recession, customers are looking for value more than ever before. You may come up with an innovative product or service that fits a critical need and you can win new customers.
Employee Training – Another important expense is employee training. It may seem like a waste of money to invest in your employees when you’re struggling to keep the lights on, but it’s actually an investment that will pay off. Training can help make your employees more efficient or interact at a higher level with customers.
Supplier Relationships – It’s also important to maintain a good relationship with your suppliers. If you start skimping on payments, they may be less likely to work with you in the future. It’s crucial to keep a good rapport with the businesses you rely on, even when times are tough. See if your suppliers will work with you on extending payments or restructuring pricing proactively.
Trusted Advisors – Finally, don’t forget to retain your trusted advisors. These are the people who can help you make sound decisions during a recession. If you cut them out of your budget, you’ll be flying blind when it comes to navigating the challenges ahead. If you do have to trim full-time payroll you can access talent through fractional programs as well.
Recessions are hard. Being mindful of your spending can help your business weather the storm. Just remember to keep your eye on the long game, and don’t sacrifice investments that will pay off down the road.
