The year is 2024. A Nigerian company, unable to renew their Slack Pro subscription for its fully remote team, has downgraded to the basic plan. Employees wake up and cannot send Slack messages because of the new limits. Work suffers and it is more dismal when you remember that sales were low that month, especially as clients have been churning more rapidly than usual. The CEO is frustrated and drinking for longer hours when he meets with his other founder friends on Fridays. They bemoan the economy, their teams, customers, and the myth of a work-life balance. Afterwards, the CEO goes home and is in deep thought until he falls asleep. The next morning, he joins his Team meeting at 8 am with a chipper spirit. Business will go on as usual but the CEO feels increasingly terrified about the future of his company. The only thing that keeps him going is the sheer resilience that is characteristic of every successful African entrepreneur. It is waking every morning and choosing to go hard instead of home, in spite of the subscriptions that are yet to be renewed or the employees that come and go.
For every Founder or CEO grappling with the uncertain African economy and a gross lack of resources to stay afloat, we have put together these money-saving tips that can help you cut costs and hedge yourselves against the challenges. With a fervent hope that things take a miraculous turn for good, we want to help you consider aspects of your business where you can spend less in the meantime.
1. Forget the Aesthetics
Looks help, but functionality is what keeps you in business for the long haul. When considering how to position as a business in these times, always choose the more practical approach. For instance, if you are buying that overpriced swivel chair only because it will look good on Instagram, don’t do it. Assess your spend holistically as a business, and determine which expense is to be made because it feels good to do so or because it is essential to your business’s growth. This includes decisions like hiring, buying office equipment, marketing spend, and so on. If you cannot qualify its direct benefits to your business, then now is not the time to invest in it, and yes, take this advice even if you are well-funded and “worry-free”. As long as you operate on the African landscape, you must move logically and shrewdly.
2. Reduce cloud costs
With the steady rise of the dollar and devaluation of local currencies, it has become a survival move to re-evaluate your cloud costs and reduce them. To be completely honest ab0ut your evaluation, you must analyse every single expense that goes to cloud providers, especially if those payments are in USD. Move data that you don’t immediately need to a cheaper storage platform. Fully utilise platforms that you are paying for, because your cloud provider may be offering other solutions that are more cost-effective than using a different provider for each new need. Finally, switch to local providers if possible, and reduce your cloud costs by 60% or more.
3. Review every spend
This is the time to assess every app you pay for and determine which is most relevant to your business growth. For instance, productivity apps are nice, but do you really need that many in this phase of your business? Which apps do you barely use yet still pay for? If you run a physical office and the nature of your work allows it, make your work arrangement more hybrid to save money on operational costs. You never know what costs you can reduce when you look at every spend critically.
4. Digitise a few more processes
One of the first places to begin is by digitising your administrative tasks. When you automate routine tasks like payroll and HR, you save valuable hours and build a more optimised workforce. Bento Africa empowers businesses with better work processes through payroll and HR solutions. To get started, book a demo here.
5. Think about your people
People are the lifeblood of every business and your highest chance of survival as an African Founder. It is your responsibility to be the kind of leader who inspires ownership and dedication to the job, and this is most evident in how you treat your people. Show kindness and empathy by paying salaries on time, giving access to benefits, rewarding people for good work, sharing constructive feedback, and encouraging a culture of open communication. This way, you will be increasing productivity and reducing turnover, saving money and time spent on scouting new hires and re-educating them. Bento People provides solutions for engaging employees through hiring, onboarding, appraisals, background checks, and more. You should check it out today.
We are rooting for you, dear African Founder. We hope these tips help you cut costs and be smarter about where to place your financial priorities.
