4 Creative Ways to Reduce Business Expenses During Coronavirus
By Paul McCoy, CIMA®, AIF®
In the era of COVID-19, the consumer market has been anything but normal, causing many businesses to scramble in response. Even as time has progressed, a survey of CFOs indicated that the financial impacts of coronavirus have consistently been a top concern.1
If your company needs to contain costs in order to achieve financial stability - during a time of extreme instability - these four strategies can be used to help consolidate your spending and protect the longevity of your business.
Way #1: Switch to Remote Work
Over 60 percent of employees have transitioned to working from home as a result of the coronavirus.2 Remote work has experienced a huge surge in popularity, and for good reason; it can be a big saver when it comes to resource expenses, and it often goes hand-in-hand with implementing flexible work schedules and, as a result, different payroll procedures.
If your business is in a position where it can adapt to remote work, take the opportunity to do so. This will drastically reduce employee-related expenses and can also serve as a segue into other cost-saving actions.
Other Employment Options
No one wants to be forced into the position of letting employees go. If COVID-19 puts your specific industry in a tight financial situation, or if you currently can’t conduct substantial business remotely or in-person, consider saving jobs by suspending benefits or adjusting some employees to part-time.
Way #2: Eliminate Unnecessary Expenses
If your company has made significant adjustments, such as transitioning to remote or partly-remote, chances are there are a lot of expenses you don’t need to be paying for anymore.
Don’t let the excuse of “stocking up” stop you from cutting costs on office resources. This includes everything from office equipment or space to simple expenses, such as toiletries or paper supplies.
Make a point to round up all of your regular service expenses and decide what you need and what you can forgo, at least for the time being. Think about necessary utilities such as heat, water and electricity, but also don’t overlook other recurring subscriptions you may have, such as internet, phone or recreational services.
Travel or Parking
For most industries, travel expenses are already way down. Take further advantage of this by reducing parking expenses for parking spots you may not be utilizing. If you’re still having employees travel, it might be time to evaluate if it’s really necessary or not.
Way #3: Take Advantage of Flexible Billing
Many suppliers, banks and landlords are being flexible and understanding during this time. It may be worth it to at least reach out and ask what options may be available to you. They may allow you to delay certain payments or take out a loan until your business is in a better financial position.
If you take this route, be sure that you fully understand the terms of your agreement. The last thing you want is to get stuck in a worse financial position down the road.
Way #4: Rework Your Marketing
84 percent of marketers have been improvising new marketing strategies in response to COVID-19.3 You should try to reduce marketing expenses that no longer offer an advantage, such as an advertisements at large in-person events. This doesn’t mean, however, that you need to sacrifice or abandon your marketing efforts.
Get creative and dive into digital marketing. More people are on the internet now than ever, and if you leverage it correctly, you may just build your company’s presence and generate some more revenue.
Don’t lose hope if your company’s financial outlook is unclear. Simply continue to focus on your growth, find new ways to market your product or service and cut costs where you can.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.