The pandemic created a ripple effect that spread across the globe and disrupted every part of our lives. For business owners, it’s created significant financial devastation, a heightened sense of uncertainty, and the ultimate motivation to survive and thrive.
Business owners have had to furlough employees, drastically change their processes, and come up with creative ways to stay afloat. They’ve learned a valuable lesson: you can’t control a pandemic or the economy. But you can control your reaction to the situation and the way you manage your business.
Positive cash flow is critical to maintaining solvency. Yet the average small business only has enough cash reserve to last 27 days!
Use these 5 tips to keep your business on track now and after the pandemic.
- Take advantage of assistance programs. Many banks, lenders, credit card companies, and service providers are offering bill deferment. Find out if you qualify.
- Reduce non-essential spending. Review large expenses. For example, can you return the leased equipment you don’t use? Evaluating large expenses and making changes – office space, travel expenses, and software programs – can make a big difference.
- Reduce payroll expenses. Payroll is usually a company’s largest expense. And while reducing a workforce will immediate reduce payroll, many employers can first implement less drastic measures. Ask employees to take a temporary pay cut, or temporarily freeze nonessential benefit programs and retirement employee matches.
- Shop around. From service providers and office supplies to suppliers and software, it makes sense to audit contracts and renegotiate for cost-saving opportunities.
- Evaluate your marketing strategies. Many business owners pause their marketing efforts during an economic downturn. That can actually do more harm than good. Instead, review your marketing strategies and focus on what is working. Seek newer, more affordable marketing avenues.