The recent COVID-19 outbreak had altered the lives of millions of people around the globe, and the economies in which they live and work. As the virus spread to every country and city over the weeks that followed the pandemic announcement, businesses, governments and many countries responded to the threat differently, ranging from keeping a physical distance and sanitation guides to providing shelter-in-place. And as the severity of the crisis compounded, lockdown and closures began to affect large and small businesses in almost every sector of the global economy.
The coronavirus pandemic is the most challenging crisis businesses have ever faced. As some organisations have been forced to close their doors, many business owners have struggled to cut costs and mitigate risk to maintain not only production and profitability but their very existence. In these difficult times, developing a plan for decreasing business costs and optimising efficiency can pay off and help to weather the storm for both small business owners and larger companies. In this article, we will take a look at how you can reduce costs, save money and keep your business afloat during this coronavirus pandemic without affecting your long-term savings.
Review Your Bills & Focus On Necessities
During your financial assessment, you should highlight three expense lists such as fixed, variable and periodical. From there, try to remove non-essential expenses, which can fall into any of these three categories.
If the expense doesn’t help your business, be very critical and delete or cancel it. If these spendings might be necessary, but you aren’t sure, try to find other solutions that can be cheaper or even free. Thus, you can replace the costs with an alternative until the trade returns to normal. When it comes to periodical expenses, you can postpone or reschedule services, for example, service costs or vehicle maintenance.
You can even review fixed fees to a pay-per-use basis. Try to contact service providers and switch your monthly fixed fee to a pay-as-you-go option. You can also pause certain payments like business internet lines until they are used again.
Request Payment Deferrals From Suppliers
Cutting business expenses doesn’t only mean reducing outline items in your budget. One of the methods to lower your costs is to try to negotiate with customers and creditors and request payment extensions from suppliers. Contact your customers to check if they can accelerate payments. Approach your landlord, lenders, mortgage company and credit card companies to let them know you might have trouble paying and find out what arrangements can be made to delay, reduce or forgive payments. Do everything you can to get paid faster and postpone paying your bills.
Also, instead of waiting until you miss a payment or get an overdue notice, reach out to your suppliers and vendors with a proposal for deferring payments. Since all businesses and their supply chain are affected during this time, many major suppliers will be expecting this and might be able to help you. After all, their business depends on partnerships with many companies, just like yours.
Innovate Your Business Processes
Consider innovating and structuring processes of your business to save time, boost efficiency and reduce costs. Even a minor change to your approach can help to save time. In the end, this counts as money saved, which is crucial during uncertain times like this.
Unfortunately, it won’t appear on your expense report, but the time your employees spend completing tasks matters too. If it’s been a while since you reconsidered how your organisation operates on a basic level, it might be time to do so. You may not be saving on direct costs, but that’s just as important.
Seek Out Government Help
While some places have seen limited success in limiting the spread of the virus, their policies have had a profound impact on the economy, in particular the tourism, hospitality, retail and restaurant industries. Luckily, local and national governments, international institutions and private non-profits organisations are stepping to provide necessary aid during the crisis.
Whether you are a small company searching for capital to continue operations or looking for ways to re-open your company during these uncertain times, there are numerous financial sources. This financial support intended to help small businesses affected by coronavirus to cover wages on a temporary leave of your employees or access finance more quickly to cope with this ‘new normal’.
You can choose between different options such as Coronavirus Job Retention Scheme (CJRS), Bounce Back Loan System (BBLS), Self-Employment Income Support Scheme (SEISS), Future Fund, Coronavirus Job Retention Scheme (CJRS) and Coronavirus Business Interruption Loan Scheme (CBILS lenders) to find suitable variant and the necessary amount that can help to survive the crisis.
Adjust Your Business Model & Plan For The Future
From fitness instructors offering online classes to retailers expanding e-commerce or providing curbside pickup, there are many ways to change your business and survive the coronavirus era. While your business is temporarily closed, try to think creatively and research how you can adapt your business to serve customers.
How can you sell your product or provide service on the Internet or offer delivery, takeout, drive-up or pickup service? Depending on the type of your business or service if you have an online delivery platform or corresponding e-commerce site, making such a transition shouldn’t be too difficult. In case you don’t have these services in place, you can email your customer list and promote on your social media channels that you offer these services at your business now and take orders by email or phone.
The Covid-19 pandemic will eventually end, and when that happens, the organisations still standing will be those that coped with the difficulties. Use this time to improve the qualifications of your employees and your own skills, strengthen connections with your community, connect with your customer base, and you will come back stronger than ever when the crisis ends. Make sure to stay informed and flexible. What we know about the virus changes is changing day by day, so keep your options open and develop plans for various scenarios.