We’ve just passed the year mark of what everyone originally assumed would be a few weeks of disruption. With the “new normal” seeing so many of us, where possible, lucky enough to work from home, business owners have had a very unique set of circumstances to address when looking at fixed costs.
Fixed costs used to be a major bug-bearer for businesses. You might never have noticed it when at work. Still, just like comparing electric, mobile or broadband prices anytime you hear contracts are going up, getting to know your fixed costs and how to adjust them can be vital for a business. While everyone isn’t able to return to the office just yet, what should a business be looking at to help lower fixed costs right now? Here are just a few pointers to help get started and hopefully see you realise there are savings to be had.
Double-check local support
A lot of fixed cost services may be tied to local council and government schemes. A prime example of this would be furlough. A small example would be seeing your local council has had rates holidays in place you might not have known about. I recommend getting on the phone with your local council and asking them exactly what type of practical advice they are offering local businesses. You will find they tend to be incredibly supportive and thoughtful in running through fixed costs and services you may be paying more than needed. It’s a case of don’t ask, don’t get.
Talk to your suppliers directly
Now isn’t the time to start haggling with your variable cost suppliers. Instead, ask them what they are doing to help businesses like yours when times may be difficult. For example, suppose your office has been almost empty for the better part of a year. In that case, you might want to phone your business water supplier and electric supplier to ask about your tariff and consumption. It is important to note that while essential services like water, electric and heating are fixed, they are deemed variable by some due to how price and demand can vary wildly.
Things like energy usage and water consumption are taking for granted, but I like to think of them like this. Imagine every person in your office was using a kettle once a day to make a cup of tea or coffee. Think of the tiny amount of water and electric needed. When you consider how many people would’ve used it every day and expand that to over a year, it does add up to more energy and water used than you think.
Phone your supplier and ask them if they’ve adjusted your tariffs in recent months or taken notice that usage is down. If your bills are still on the up, and you know there are less staff around, it needs checking out.
With the summer now seen (fingers crossed) as the time when things can start getting back to normal, many businesses will have the urge to ramp things up. But, if you look at what happened to many in the hospitality industry who had their hopes for the Christmas period dashed, you don’t want to be left with a glaring hole in your fixed and variable costs.
Start working out when you’ll need to pay on services for the next 1,3,6 etc. months from now and allow yourself not to be surprised by costs. It will help you see those areas where your business may run into trouble, but you could avoid with a little foresight.
These have been just a few examples of how any business can start lowering costs now to protect itself. Just remember, any measures taken now before the world gets back to normal is only a good thing.