The current health crisis has put the survival of many people all over the world in jeopardy. The risk isn’t confined to your physical well-being but extends to your financial and economic well-being, too. According to a recent survey, in the United States alone, as many as 7.5 million small businesses all over the country are in danger of closing permanently because of the crisis.
When you own a small company, keeping it afloat is your primary concern. Shutting down isn’t an option because it will cost your employees their jobs and financial security. You can ensure your small business survives to see better times by paring down your operational costs so you can put those resources to better use. Here are a few ways to reduce costs and streamline your business budget:
Digitize as much as possible
Going digital can remove a lot of unnecessary costs from your budget. First, removing your business’s landline is a good move since most people now use cellphones and smartphones to communicate. You can also start to go paperless. Now is an ideal time to experiment with this since working from home encourages paperless transactions. Depending on the size of your organization, you can save hundreds if not thousands of dollars by reducing expenditure on office supplies like paper, notepads, and writing implements.
You can also begin investing in expanding your business to online platforms. For example, make use of teleconferencing software to meet with clients face to face, try putting your products on e-commerce platforms, and similar digital solutions.
Turn to Outsource
If your company needs specialized services, such as marketing or anything technology-related, resist the temptation to hire new employees. Focus on keeping the employees you already have by directing resources to outsourcing. Certain services require specialized training and experience to do effectively, which means hiring someone who might cost your business a lot of money that you can’t afford to lose.
Look for reliable outsourcing solutions instead. For example, if you need someone to look over your business’s finances, try a company that provides white label accounting solutions. These outsourced service providers help you focus on keeping your business viable and streamlines your organization.
Decrease Credit Card Dependence
When your business doesn’t have many liquid assets, you can be tempted to use credit cards extensively to pay for operational costs. This isn’t a viable long-term solution to your financial woes. Although credit cards can be a lifeline, you need to be discerning of which situations require you to break out the plastic. The interest rates on your credit card debt tend to snowball, particularly if you’re having trouble keeping with payments. Only use your business credit cards if you have no choice.
You could consider getting a business loan, and it’s best if your credit score is good. Lending companies often check with credit-scoring companies to see if you are credit-worthy, so make sure that your business and personal credit cards are managed well.
Reduce Office Space
Renting or leasing commercial real estate can be one of your highest overhead costs. This might be an unnecessary expenditure if you’re forced to close your premises due to the crisis or if you’re transitioning your employees to a work-from-home setup.
If it’s feasible, terminate your office space and move your equipment and furniture to storage for the time being. If you need a physical location because the nature of your business requires it, shop around for smaller spaces in less costly areas. While the prestige of specific business addresses is undoubtedly alluring, it won’t matter if your company closes because of bankruptcy.
Prevent your business from closing down and take care of your employees by paring down your operational costs. With the right financial decisions, you and your organization can make it through this crisis and emerge stronger than ever.