Some small (and large) businesses didn’t survive the COVID crisis. Companies that continue to survive or even thrive during these times have particular traits, such as:
- Access to cash – either through shareholder’s reserves or bank debt
- An ability to adjust and adapt quickly
- The willingness to try new tools and ideas
- A product or service that is in demand
- Finding new ways to serve or reach customers.
Fortunately, there’s light at the end of the COVID tunnel now with vaccinations beginning soon, but we’re not through the crisis yet and it’s impossible to tell how 2021 will play out. It’s still necessary for most small businesses to reduce expenses and continue to take advantage of online tools and practices that became popular during the pandemic.
Using new tools and technologies is great, but cutting costs is not normally a strategy for building prosperity or for becoming a great business. Cost-cutting should only be used in an emergency . . . but that’s what we’re experiencing right now.
Here are three areas where you may find some significant savings post-COVID:
- Your office lease, mortgage or rent
Unless your team was unable to work from home due to the nature of your business (for instance, if you’re a manufacturer or healthcare provider), you’ve probably already taken advantage of offsite work during the COVID crisis. In fact, you may even have decided that employees can continue working from home, at least part-time. So how much office space do you really need? Could you downsize, reduce storage or share office space with another company to cut costs, either short-term or permanently?If you decide you need to keep your current space but are struggling with the expense, you may be able to negotiate a better rate. Business Australia has put together a lease negotiation guide that includes topics such as understanding market values in your area, your rights during COVID and how to negotiate with your landlord.
- Travel & training expenses
Most business travel was cut altogether in 2020. You may have budgeted for travel again in mid- to late 2021, anticipating that you’ll be able to meet face-to-face with clients once more, participate in interstate trade shows or attend an industry conference. But with everyone now used to Zoom, Skype and MS Teams online meeting software, how often do you really need to leave town?
There’s no denying the value of occasional in-person meetings with clients or colleagues, but you can cut back and reduce costs associated with transportation, lodging and fees. And in terms of staff training, affordable online learning options have exploded over the past year, so you can provide your team with excellent ways to learn new skills through programs.
- Online options for software
If your team has been working away from the office, you’ve doubtless been using some cloud-based software solutions (such as Microsoft 365). You may have avoided other cloud-based options due to perceived cost, but many programs and apps are offered online in pay-as-you-go models that allow you to pay only for the pieces you need. Plus, going cloud-based helps you avoid buying hardware and saves precious office space. There are also many fantastic online software programs with free or low-cost plans that can help you eliminate more expensive software or hardware tools.
Finally, don’t wait until bills are overdue or cash dries up to take action. Talk with your accountant or business advisor and put together a strategy. Suppliers and banks are more likely to work with you if you contact them in advance. Your tax advisor can explore possible tax deductions, and your accountant can review your expenses and help you find areas to save. If you need assistance creating leaner business operations, a discussion with a business improvement specialist may be your best solution.