When revenues begin to slow and profits decrease, small business owners are often faced with making difficult decisions.  Reducing overhead costs may be your most effective option, but deciding where to make cuts presents a challenge.

When you have loyal employees, you tend to feel a sense of obligation to them. You understand that they depend on their jobs to meet their financial obligations and support their families. You want to avoid layoffs whenever possible, but you have to control your expenses.

The following five strategies can help you to effectively reduce your business costs while keeping your employees out of the unemployment line.

Freeze Payroll Expenses

Payroll typically represents one of the largest portions of company overhead. As an alternative to cutting positions, many employers find minimizing excess payroll expenses to be a viable option. This includes freezing overtime, wage increases, bonuses, and raises.

Improve Payment Processing Efficiencies

If your business accepts credit card transactions, you may be feeling the crunch of having to wait several days for debited funds to post to your account.

AmeriCard’s credit card processing service offers a better solution. With hassle-free processing and later batch times, you can expect funds from credit card transactions to post to your account the next day.

Reduce Fringe Benefits

When profits are down, every penny counts. Take a close look at your spending and consider reducing non-necessary travel costs and training expenses. Postpone non-critical equipment upgrades and compare the cost of repairs versus replacement.

In some cases, it makes sense to cut fringe benefits and perks like free coffee, water delivery, and holiday parties. If you are concerned this will negatively impact employee morale, keep the benefits but seek less expensive alternatives.

Implement Telecommuting Policies

If your business structure allows, consider having employees work from home and telecommute. Eliminating the need to provide office space for all employees can be a huge cost saver. Additionally, employees are often willing to make some sacrifices in exchange for the elimination of a daily commute.

Offer Flex Schedule and Unpaid Leave

Employees will often view extra vacation time as a perk, even if it is unpaid. You may also consider restructuring the workload to allow for shorter work weeks or reducing some employees to part-time hours. This is particularly effective for companies that experience seasonal slow-downs.


Remember that your employees are one of your most valuable resources. Ask your staff for additional suggestions regarding expense reductions and take their feedback into consideration.If everyone feels involved in the cost-cutting efforts, it will create a sense of loyalty and ultimately improve your results.