What will the post-coronavirus business world look like? Regardless, one thing is fairly certain—to survive, businesses will have to do more with less, particularly when it comes to business expenses.
Numerous cost-saving approaches exist. A business can undertake a top-to-bottom overhaul; it can close one or more departments; or it can make cuts in its workforce. If none of these options are very appealing, there are other ways to reduce expenses and keep the business solvent through the lean times ahead.
Here’s a look at ways to save money for your business:
Consider a workplace reconfiguration.
It’s entirely possible that the workplace that existed before the pandemic will (or should) look different afterwards. To test this theory, do a thorough and objective assessment of all aspects of your physical space. Are there ways to regroup equipment and workspaces to make better use of limited space? What about opportunities to employ one space for several functions, such as having a conference room serve as a common area when meetings aren’t happening?
A smart workplace reconfiguration can result in lesser utility and rent costs.
Renegotiate leases or other purchasing arrangements.
Starting up business again after an extended closure might be the ideal time to renegotiate the leasing arrangement you have with your landlord. Determining a lower rate is something a landlord might agree to, particularly if his or her other tenants have abandoned their own businesses and property stands empty.
Get rid of equipment that’s no longer needed.
Some equipment you’ve leased or purchased before the pandemic won’t be of much use during the recovery period. Look closely at every piece of equipment or technology and see if it’s something you can do without. For example, if you sell a company car or truck “for less than you owe and must make up the difference to pay off the loan, you’ll often net large cash savings over time,” advises Nolo, a consumer legal site.
Discuss cost-cutting measures with current vendors (or look for new ones).
Vendors will be as hungry for new business as you are in the recovery period. An existing vendor may be agreeable to explore ways to reduce purchasing expenses, or if your contract is up for renewal, it might make sense to reach out to other suppliers who are willing to charge less in order to become part of your new supply chain.
Explore virtual alternatives to meetings and paperwork.
Having employees attend meetings (or asking them to travel across the country for client appointments) means taking time away from their normal duties and/or incurring additional travel and lodging costs. The COVID-19 outbreak has seen a boom in the use of virtual meeting technologies, and there’s no reason you can’t prolong this cost-saving approach in the months to come.
Also, the rise of new collaborative technology enables employees to work on documents and product development without the business having to pay for paper documents.
Reduce or eliminate some employee perks.
It’s not ideal, but if you’re serious about cost-cutting, there may be some existing employee perks worth eliminating (at least temporarily). Everything from having newspapers delivered to the office to keeping the breakroom stocked with bottled water should be considered.
Employees won’t like it, but with a clear explanation from you—and the assurance that saving costs in this and related ways will likely save jobs—they will usually get on board. As Nolo notes, “working hard to chop every possible expense sends an important message … that you are determined to do what it takes to survive.”
TAB can help your business during the all-important recovery phase. Get valuable tips and insights at our COVID-19 Resource Center.