How businesses can save money in 2021

The year 2021 looks like it’s going to be more of the same thing. We can expect to continue working remotely and keeping our distance. At least until the summer, which by then the vaccines are expected to reach at 70-85% of the population. Meanwhile, life goes on. Entrepreneurs and small businesses must find ways to grow and scale up during an extended global pandemic. Faced with the economic impact of ‘avoidance behavior’, businesses must be able to save money and use resources strategically.

Here are some key measures that small businesses can do to manage their resources more wisely in 2021. 

Automate When Possible 

Automation hits several proverbial birds with one strategic stone. 

Firstly, it enables businesses to downsize without risking drastic disruptions to continuity. Forced to make difficult decisions, many businesses in 2020 have let employees go. In turn, that has opened gaps in the organizational skillset. Automation can help fill those gaps. They allow business can automate low-variance jobs like administrative documentation, recruitment, and other routine responsibilities. 

Secondly, automation enhances business efficiency. Repetitive tasks can cause fatigue in employees. Which, in turn, increases stress, and diminishes the ability to stay focused and responsive on the job. Automation helps keep the blood running, so to speak. It helps employees stay active by taking over repetitive and uninspiring tasks. According to a Zapier study, employees completed tasks faster and stayed more organized when they had automation help. Much in the same, automation helps entrepreneurs focus on their business forte, whether that’s product branding or closing deals. 

Lastly and most importantly, automation helps businesses save up resources in the long-run. Technology is much more cost-efficient than spending money a non-essential hire or on compensating for business inefficiencies. At the same time, they can use the money they save towards other growth endeavours. 

Embrace the Benefits of Remote Work

Baruch Silvermann, the CEO of the Smart Investory summarizes the cost benefits of working remotely in four ways: businesses get to save on rent, they save on electricity, water, and othe utility bills, they don’t have to conduct any maintenance, or pay taxes on having a physical site for their business. In addition, the comfort of working remotely reduces attrition rates and increases productivity. Employees save on the costs of communiting to work. They enjoy the benefits of being able to work to their convenience and comfort. Plus, they’re generally mentally more fit to do the job. 

That said, it’s important for companies to remember that just because they’re not paying for rent or office utilities, it does not mean that the costs are not there. It’s just that the burden of paying them has shifted to their employees, wherever they’re working from.

At the minimum, federal laws that require employeres to reimburse work-related expenses, particularly if these expenses bring the employee’s earnings below minimum wage. Companies like Shopify and Indeed are paying their employees to set up their home offices. Other experts feel that companies should reimburse their employees for work-related expenses as a principle. Firstly, because it’s equitable. And secondly, because laws are changing and will eventually ensure that terms remain fair for both employer and employees. 

Given that caveat, reimbursing employees still adds up to a much cheaper alternative than having to pay the costs of running a business on site. According the SHRM-SCP Human Resources director Michael Trust, says paying for remote work expenses are “likely still less than the real estate and facility costs for having people work in the office.”

Outsource Roles and Responsibilities 

Businesses turn to outsourcing when they want to save on money. It’s no secret that outsourcing certain roles and responsibilities reduces the costs of doing busines by at least 20%-30%, according to the Harvard Business Review. Each businesses has their own criteria for choosing which jobs they want to outsource. But, ultimately, they are motivated to find a less costly and more efficient solutions, which outsourcing provides. Instead of hiring a full-time employee for a singular task or a seasonal project, businesses can outsource for a fraction of the cost. In addition, these third-party firms and professionals bring a degree of much needed expertise and efficiency.  

Outsourcing also saves companies something that can’t be recouped as easily as money: time.

Time that isn’t spent on recruitment, onboarding, training, or retooling is spent, instead, on growing the company more efficiently. 

For example, a small food company that’s really good with research and development could benefit from outsourcing other functions of their business, like accounting and marketing. It’s not enough to have a really good product. Businesses have to work on other things, like staying on top of their finances and invest in developing and communicating their brand values to their target consumers. That requires a lot of time. Outsourcing helps small companies free up their plate of responsibilities and focus on their strengths. 

Think Ahead: Get Ahead

In 2021, businesses need to think about the strategies that will not only help them survive but also thrive. Automation helps companies increase efficiency and fill in any skills gaps. Embracing the advantages of remote work help companies save a lot of money that they can use to strengthen their employees’ ability to work remotely and to develop other aspects of their business. Finally, outsourcing can help companies grow by staying lean and focused on the things they’re good at. All the while, they’re tapping third-parties to improve aspects of their business that need a more expert hand. All in all, these strategies can help businesses save money and time, in order to use them more strategically as they navigate the challenges of the day and the uncertainty of the future.