COVID-19 could be with us for a while, making it vital to find places to trim costs and operate as leanly as possible in both the short- and long-term. Here are a few ways to save some money and boost your efforts to stay cash flow positive.
Reduce or Eliminate Office Space
Office space can be a significant overhead. If you haven’t noticed any significant downsides to working from home during COVID-19, consider making remote working your new normal—at least until we are out the other side of the pandemic. Even large businesses, such as Slack and Facebook, are making working from home a permanent arrangement for all or some employees. Virtual communication and collaboration tools like Zoom, Slack, and Google Docs have helped many businesses make the switch to remote working.
If you feel you need that physical space, consider downsizing your office to save on rent and operate a flexible home working policy that makes a smaller office viable. Coworking spaces can give you the best of both worlds—a full- or part-time office space without committing to a long lease.
Cancel Non-Essential Monthly Subscriptions and Services
How many of us subscribe to a TV service we rarely watch? “Subscription creep” can affect businesses, too. Take a look back through your last couple of months of expenses. You may be surprised at the number of subscriptions you had forgotten about or don’t really need. The monthly amounts might be small, but they can add up to hundreds of dollars a year. Take an inventory of all the software, tools, and other services you pay for each month and be ruthless about culling them.
Phone and Internet plans can also be pared back to the minimum. Do you need that office cleaning service or can you do it yourself or reduce the frequency? Do you read that industry magazine or is it just for show in reception? Often you can find free or lower-cost alternatives to tools and services you do need, so shopping around can be time well spent.
Cut Down on Business Travel
In better times, conferences, trade shows, and other business events might be a regular part of your annual business calendar. In the current environment, look at how you can switch your networking and professional development to online only. Many of your favourite networking events or annual conferences may now have online alternatives. COVID-19 has also seen a huge rise in online learning. Paid platforms such as LinkedIn Learning and free Massive Open Online Courses (MOOCs) can help you keep your skills updated and still encourage employees to look after their professional development, at a fraction of the cost of in-person courses and conferences.
You might also be able to reduce the number of in-person sales and other meetings you need to travel to. Even reducing local travel can save on gas, parking, and other expenses. Virtual meetings have become a much more common and accepted part of doing business over the last few months, so you are unlikely to encounter much resistance if you suggest a video call.
Negotiate Better Deals
Review your supply chain and look for places to try to save money. For example, can you buy some supplies in bulk if you have the storage space? You may also be able to negotiate better prices or payment terms with your suppliers, distributors, wholesalers, manufacturers, and other suppliers. Some vendors offer discounts for paying early as it helps their cash flow. If you can afford to pay suppliers quickly, it’s worth exploring.
You should also review your dealings with insurers, banks and other financial institutions. You may be able to negotiate a better insurance rate, switch to a bank account with lower fees (or to a different financial institution entirely), or take out a line of credit to reduce your reliance on credit cards with higher interest rates.
Streamline Your Marketing
Marketing is essential to the success of most businesses, but it doesn’t have to come in the form of glossy print brochures and expensive print and radio ads. The key to making every marketing dollar count is to constantly review what works and what doesn’t, and focus on what generates the best return on your marketing investment.
For example, instead of printed marketing collateral, focus on more cost-effective marketing strategies such as targeted pay-per-click online advertising. Build an email list so you can stay in touch with customers and prospects, and become part of the conversation on social media in your location and industry.
Don’t forget that your time is also money. Spend your time on things that can make a real difference to your bottom line, such as focusing on your high-value customers. Finally, make sure you are taking advantage of all available government programs and other funding.
If you can stay lean as we get through this period, you’ll be in great shape to hit the ground running when the pandemic is finally over.
Find Out More
At Small Business BC, we’re committed to helping business owners reopen in a safe and successful way. Our Back to Business campaign features specific advice and guidance in the following areas:
- Operational Health & Safety
- Restart Strategy
- Marketing & Communications
Alternatively, visit our BC Business COVID-19 Support Service and connect with our Business Advisors to get answers to your specific questions on reopening.