Reducing your overall business running cost is a major action you must take if your business must survive and thrive after the coronavirus pandemic. According to experts from the Harvard Business School and MoneyFarm Services, an average small and medium scale business has enough cash to last for only about 1 month. Regular cash flow is needed for maintaining solvency especially when demand and sales fall. However cutting down overall business running cost and seeking financial business help can help position the business for productivity.
In this post we’ll discuss about some of the tips to help you reduce cost after the coronavirus pandemic.
1. Bill deferment
Many utility companies, lenders and banks are currently offering small scale businesses affected by the pandemic bill deferments. You can apply to see if your business qualify for such opportunities.
- Loans- you can contact your lenders and other credit unions you’re indebted to, to see if they can defer al mortgage loans for 12 months. You can also reach out to your bankers to see if they can suspend monthly auto loan repayments for a temporary period until business activities resumes fully.
- Rent- businesses and companies that rent out open spaces can talk with their landlords to see if there is a way they can suspend rent payments for a temporary time
- Utilities- small scale business can reach out to utility companies to negotiate their accrued unpaid bills.
2. Eliminate all non-essential costs
As much as possible business must learn to cut down overall costs in this coronavirus season. Also you must eliminate all non-essential spending. This means cutting down all costs that are not directly essential to the business operations like
Although the social distance and lockdown has limited travels, some companies still cover the travel allowance of some employees. It’ll be wise to investigate if the task can be done remotely or virtually. This will help save cost and increase maximum productivity.
Reduce payroll expenses
Payroll mostly constitute the largest expenses of most companies, and it’s rather unfortunate that many companies are forced to terminate the employment of some of their staffs to save the businesses. Some have to cut down the salary of their employees by 50-70%. Some others have been able to cater for their employees through the crisis. Whatever be the case, employers should look for the best possible ways to still support the employees the best way they can
Part-time or limited days
instead of terminating their employment, companies can reduce the pay of the employees by reducing the working hours making them to work part time.
Layoff or terminate employees
in case scenarios where the company or business cannot afford to pay salaries, then they would be left with no other option than to terminate lay off some employees.
3. Seek cheaper options
It is a known fact that businesses must spend money to make money, the coronavirus period is a time to exercise some level of frugality. It’s also a time to seek for more cheaper and money-saving alternatives.
Move sales online- cutting down costs does not mean total shutdown of business. You must invest in digital marketing and ecommerce. This way you’ll save a lot of money associated with the physical day-to-day running of the business.