With the global pandemic in our rearview mirror and an upcoming election here in the United States, 2024 should be an opportunity to post record numbers for businesses of all shapes and sizes across the country. However, things aren’t as positive as we might like to see closing out 2023.
Regardless of the shape your business is in right now, or whatever may lie ahead in the coming year, there is nothing wrong with being cautiously optimistic and attempting to cut costs while hoping for monster revenues in 2024.
To help you plan for the worst-case scenario on a just-in-case basis, here are seven areas you can save a few dollars and stretch your budget if you find it necessary in 2024.
Tighten Inventory Controls
The first step in saving money for any business is to reduce the amount you are spending on inventory that you aren’t going to need in the short term. The definition of “need” will vary tremendously across industries, but few companies can argue that they couldn’t tighten their inventory on at least a few things.
Keep in mind that inventory here refers to much more than just your cost of goods sold. In many cases, there are tremendous savings to be had by simply reevaluating your cleaning supplies and snack pantries.
Consider New Vendor Options
While tightening down your inventory controls, you should also check to see if you can get a better deal on some of your highest-priced items from an alternative vendor. In many cases, you will find a new vendor willing to give a steep discount to get their foot in the door, but beware of the vendors that will bait and switch you into changing, only to hike the price shortly after.
Trim Labor Costs on the Edges
Inventory tends to be the first stop for saving money because boxes on the shelves don’t have feelings, but labor costs can be where you find the most gains.
Trimming labor is hard because you don’t want to ask your people to sacrifice, but if you approach the issue honestly, you will often find that some employees would enjoy a little more time off with their families.
Use Savings to Pay Down Debt
Debt servicing is another frustrating expense for businesses of all sizes, and the rising interest rates are making that a much bigger problem heading into 2024.
One way to address this problem is to use rainy day funds to pay down any outstanding debt financing. This will eliminate the debt payments, along with the threat posed by interest rates that may move even higher if inflation doesn’t fall in line soon.
Consider Outsourcing to AI
Artificial Intelligence is all the rage right now, but there are already plenty of positive aspects that it could bring to help your business. Services like ChapGPT don’t have much of a learning curve at all, so it would not take much effort to set it up to handle some of the marketing and content creation you are currently paying humans to do for you.
Invest in Employee Education
With AI replacing many entry-level human tasks, the way to get more value out of your team is to upgrade their knowledge base so that they can contribute in more impactful ways. Invest in the education of your employees and let that newly gained knowledge become the driving force pushing your business through 2024.
Play Offense and Increase Market Share
If 2024 becomes a down year for businesses nationwide, operators may push defensive agendas. This will create an opportunity to grow market share for businesses that have established a firm foundation and can play offense in a challenging economy. If you have the first six tactics all working for you already, you are already well on your way to focusing on offense while everyone else is sitting back on the defensive.
BONUS: Delegate Debt Collection
One bonus option for businesses that extend credit to their customers is to partner with a commercial debt collection agency to handle accounts receivable on their behalf. This gives your team the ability to focus on the things that drive results instead of worrying about outstanding balances…and it often doesn’t cost nearly as much as you might think. Direct Recovery Associates is a California-based agency that collects local debts, as well as handling national and international accounts.
No matter what happens with interest rates and the economy, 2024 will be the best year ever for some businesses. The way to make sure that your company is one of those businesses is to start cutting costs today while also preparing to attack any growth opportunities that present themselves.
