There can be no doubt that 2020 has been a very tough year for all businesses across the world. The Covid-19 pandemic has created unforeseen and unprecedented conditions that have left many companies struggling to survive, let alone find a way to thrive, grow, and make a reasonable profit.
So, it is not surprising to note that many companies are looking to make cutbacks and reduce their spending needs wherever possible. This is smart – running leaner and at a lower cost is absolutely vital if businesses are going to get through these extremely testing financial times. But actually, it is important to think not only about your budget and how you are going to reduce – but more seriously, how you are going to spend it. If your budget for everything that you do is going to be reduced this year, it is important to prioritise what you actually should be spending your money on. So, here we are going to take a look at four things that it could actually be very wise to spend your business budget on in 2021.
It seems to run contrary to common sense, but now could be the ideal time to make hires for your business. A number of people have lost their jobs through no fault of their own due to the pandemic, meaning that there is some serious talent available on the jobs market. There are many skilled professionals who are currently out of work; they could be a huge asset to your business. Think about where your business is going to be as you grow and plan for that eventuality. Now could be the perfect time to hire the people who you are going to need to make your business success a reality.
It is a great idea to take the time to speak with the leaders in your business to understand the areas of the workforce that could benefit from strengthening. Taking on the financial burden of more staff can work out if you can attract the right talent who are able to add value to your business and give you an advantage over your competitors.
It should be noted that many businesses have chosen to reduce their marketing spend. 64% of businesses recorded a decrease in their marketing budget through 2020, and as belts tighten for the new year, it is likely that these levels will not return to their previous high and drop even further than they did before.
It makes sense – businesses need to cut non-essential spending, and on the surface, marketing is a cost that you do without on a day-to-day basis. However, it should be clear and obvious that this is a short-sighted choice. Reducing spend on marketing means that you will have fewer clients coming into the business. So, 2021 is actually a time when your business should buck the trend and actually spend more money on marketing. The fact that you will have less competition – due to competitors reducing their spend, will provide your products and services with greater visibility that you might have previously gotten.
Another aspect of spending that might look tempting to cut is cybersecurity. After all, cybersecurity is something that you only need if you are unlucky enough to be attacked, right? So you might be lulled into – ironically – a false sense of security and believe that reducing spending here could be achieved without drawbacks. Of course, cybersecurity services can be expensive. Whether it is regular penetration testing to assess the strength of your systems or day-to-day expenses on managed services such as detection and response – it could be tempting to see these are needless expenses.
The reality is that cybercrime has risen, not declined, during the pandemic. Reducing spending now at a time when there is actually a greater risk can put your company in harm’s way. The financial damage of a breach of your system can be significant; it’s not just a remediation cost but also the reputational damage.
It is also important to think about the productivity of your staff. Some business owners think that productivity simply relates to how hard a member of staff is working – but this is not correct. Productivity increases are achieved not by making staff work faster, but by providing them with tools, processes and procedures to work more effectively. This could involve investing in software, apps, equipment or training, depending on the nature of your business. And the truth is that it can lead to more effective and efficient ways of working.
Spending now might seem counterintuitive, but it can actually provide your business with a basis for success in 2021. Hiring the right people and investing in them can help you develop a strong team. While marketing and cybersecurity both offer significant rewards for your investment in them.
Photo credits: coworkinglondon.com