At certain points, a tech business will need to cut costs.
This isn’t always a bad thing; a sign that a business it struggling. The need to cut costs can become apparent after examining the business spending patterns and seeing they are too high. Or it can be to try and save money for a development in future technology, an investment in growth in the future. It also may be because the business is struggling and needs to lower its monthly payments, of course - which in itself can be seen as a positive, proactive thing.
So while there might be times when you have to tighten the business money belt, that doesn’t mean it’s a simple thing to do. Tech is constantly evolving, so if you take too many steps backwards due to financial constraints, you will inevitably suffer. You still need your business to be functional; there’s always a risk that if you tighten too far, you’re going to choke the life from your company.
To avoid this, it’s important to keep in mind a few key components of your business - the areas where you shouldn’t be cutting if they’re at all avoidable. So what are the vital business components that, unless circumstances are extreme, should avoid the snip of your expenses cutting?
1) Maintenance
Technology isn’t going to maintain itself, especially if you want to stay ahead of your competitors. So if you experience a glitch with any of your systems or equipment, then you’re still going to need to dip into your pocket to fix them. If you run a website, then it’s still going to need to have its hosting paid; you’re not going to be able to avoid spending the time and money on patches for your web app. You don’t have to invest in anything new, but you do need to maintain what you have.
2) Insurance
Insurance is there to safeguard us in case something goes wrong; it’s effectively a downpayment on managing a future stress. If you’re going through a currently stressful time, then it can feel like the money you spend on your policies could be better used in other ways.
Don’t do it. If things are bad now, how much worse are they going to be if you suffer through a serious event - and you don’t have insurance to cover some of the costs? Of course, it’s always worth investigating affordable insurance for businesses so that you’re not paying over the odds - but don’t get rid of your coverage entirely.
3) Accountancy Fees
Accountants are expensive; no one is arguing that fact. However, if you cut them loose and determine you will just handle the business finances yourself, then you’re storing up trouble. You need an accountant - or an accountancy firm - because the world of business taxes and payments is incredibly difficult to navigate.
You’re going to be damaging the future of your business if you try and do your accounting yourself; not only will you struggle with it, but you’ll also be taking time from your other responsibilities. You’re a tech whiz, not an accountant, so don’t damage your business by taking a risk of self-management and finding yourself out of your depth.
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Tightening the business purse strings is tough, but by keeping the above areas as they are, then your business should be able to emerge unscathed.
