It’s scary enough these days worrying about your own health as well as the health of your family and friends as COVID-19 infections seem to be growing exponentially all around the country. For small business owners, another problem is you also need to worry about the health and well being of your business. While the government may be ordering all non-essential businesses to remain closed, employees to work remotely, and most importantly anyone who isn’t feeling well, or lives with a family member who isn’t feeling well, to stay at home, they aren’t actually giving advice on how to keep your business running with reduced or no sales. Here we will discuss how to reduce your expenses during the COVID-19 pandemic, how to make responsible business decisions during a time when your customers are experiencing similar problems, and how to set your company up for a successful future once the coronavirus pandemic is over.
Every small business owner knows that expenses will never stop, even if the economy has stopped. You still need to pay your employees’ salaries, you have to pay rent, and even if you are closed, you will still have utility bills. Of course, you also may have financed the purchase of equipment and have other operational expenses that need to get paid. Obviously the first thing you need to do is figure out how to reduce these expenses.
Your biggest expense is most likely payroll, and this of course is your most important expense. It is your employees who make your business successful in the first place. Your employees have been loyal to you, and it is very important that you are loyal to them in a time of crisis. The last thing you ever want to do is reduce hours, or even worse, layoff your employees. Not only will do you risk losing them forever, but you are putting them under personal financial hardship. Reducing pay for your employees should be the absolute last resort you should be taking in a time like this. If your business continues to struggle and payroll is the last place that you can cut costs, make decisions with your employees. There is no doubt they will understand that the business is struggling. If you are taking a temporary pay cut, they may be willing to do the same as well in exchange for job security and continued health coverage during this pandemic.
Rent on the other hand should be something that you work hard to reduce. Assuming that your landlord doesn’t want to have vacancies that could be very difficult to fill for many years to come, they should be willing to work with you during this very difficult time. Of course, you will need to use all of your negotiating power, but it doesn’t seem unreasonable that a landlord would allow you to pay reduced rent, or even no rent, while your business is closed, in exchange for you renewing your lease for a few more years.
Utilities is another place where you can save money. Yes, you need to keep the computers running if your employees are working remotely. However, if there is no one working at the office, there is no need to keep the office at a comfortable temperature, just keep it warm enough that the pipes don’t freeze. If you have multiple offices or have multiple floors, you could potentially save some money by moving all the employees who aren’t working remotely to a single location and temporarily closing the other locations. Even just closing vents in empty offices could save you some money. However, if you decide to consolidate your business locations, please make sure that you have enough space in the office where you are consolidating to, you want to make sure employees have enough space around them in case someone comes down with COVID-19. Social distancing considerations still need to be adhered to.
If you have equipment that is financed or that you rent, perhaps this could be another place to cut costs. Just like a landlord, the financers or rental companies probably don’t want to repossess this equipment, so they should be open to allowing you to stop making payments for a while, especially if you are willing to renew your leases. On the other hand, if you have old equipment that you no longer use or could do without, now might be the time to consider getting rid of it.
It is important to keep in mind that you aren’t the only one struggling, all of your customers are struggling as well. As a result, it is important that you remain vigilant that every sale you make is a legitimate sale. Sadly, in times of desperation, even honest people might take desperate measures. The last thing you want is to not get paid for a sale.
It is quite likely that you have purchase orders that were placed prior to state-wide lockdowns, or even before schools started closing. If you are ready to fulfill those orders now, you should first make sure that your customers still want those orders. If your customer no longer wants the order, you should be willing to cancel it for them. Not only does this prevent you from potentially not getting paid for the order, but it also keeps your customer happy so that when all of this is over they will still want to be your customer.
It is also imperative that before shipping an order you make sure that your customer’s business is still open. The last thing you want is for a truck to arrive at their location and for the doors to be locked. You also probably don’t want to be relying on cheap but slow delivery methods. If a product takes a week to reach your customer, a lot can change during that week and a store that was opened at the start of the week may no longer be open at the end of the week. Paying for faster delivery methods is probably well worth it, even if you have to absorb the cost.
It is also important to remember that even though you already spent the money to produce the order, it is much better to have inventory than it is to not get paid for your merchandise. It may be tough to walk away from an order, but the alternatives are much worse. So while businesses are still suffering from the coronavirus, it is imperative that you consider every business decision with a magnifying glass, and don’t be afraid of losing a sale.
You may be struggling now, but that doesn’t mean that you also need to be struggling once the coronavirus pandemic is over. You and your employees may find yourself with a lot of time on your hands, so take advantage of that. That doesn’t mean that you should turn on the TV or play games. Instead use this time wisely. When was the last time that you had an entire week to dedicate to marketing? What about research and development? And it’s not just you, it’s all of your employees. This could be a wonderful opportunity for you and your employees to discover skills you never knew you had and put them to excellent use. If someone is artistic, perhaps they could come up with some new marketing material. If someone plays guitar, maybe they could write a catchy jingle for the business. Someone who spends a lot of time on Facebook could maybe come up with a new Facebook campaign. If you’ve never made a YouTube video before, maybe now is the time to experiment and make one. Who knows, when this is all over, maybe some of your employees will have some new responsibilities.
Another key is constant communication. It’s easy to forget about someone if you don’t hear from them for a while. So even if you aren’t trying to make a sale, just sending out an update to your customers is a good way to remind them that you still exist. The update doesn’t even need to be about coronavirus, in fact, given that we are getting bombarded with information about the disease perhaps it’s even better you don’t. If you need some ideas about what to send out, April Fools Day is coming up and everyone could use a good joke right about now. So are the holidays of Easter and Passover, a simple holiday wish could go a long way at a time like this. Want to send out a message that doesn’t pertain to any particular day, not a problem. Now that your kids don’t have school, perhaps you could share some of their artwork they made at home with your customers. It doesn’t really matter what you send, the key is that you are still here and will continue to be here once all of this is over. Once we are back to business as usual, it will be the businesses that remained active throughout the pandemic that will ultimately be in the best position to thrive.
There is a lot we still don’t know about the COVID-19 pandemic, including when it will be over. Unfortunately, many small businesses have already closed their doors and some may never reopen. However, by being smart, not only can you avoid getting sick, but you can ensure that your small business will get through these difficult times and may even become stronger because of them.