As the coronavirus pandemic continues, countries all over the world are dealing with the economic fallout. With quarantining in play, many businesses are facing a shortage of consumers, limited resources, and overall lower revenues. Startups and SMEs (small and mid-size enterprises) are suffering the most from these conditions, resulting in mass layoffs and the shutting down of small businesses.
The US Census Bureau asked the owners of small businesses how they are coping with the pandemic: 75.4% of respondents have experienced large or moderate negative effects. Nearly 44% of participants say they believe that it will take more than six months to recover from this crisis. While dealing with these difficult circumstances, many small business owners are wondering how to reduce the harmful impact, particularly through business expenses. Here are some vital steps that an entrepreneur can take to cut any unnecessary costs of their startup or SME.
1. Learn How an Economic Recession Can Affect a Business
The first step to preparing for this situation is to find out how the business will struggle. Use tools to analyze the budget and the potential revenue loss from the pandemic. Also, take into consideration the strain that will be put onto your customer base, vendors, contractors, and partners. An assessment tool such as DCI Software will come in handy in analyzing the changes that are happening as a result of the pandemic.
2. Come Up With a Strategy That Works Around the Economic Crisis
Once an owner has a clear picture of how the pandemic will impact business costs, the next step is to create a strategic plan that works around these newfound problems. For short-term issues, you can immediately decide to cut down on business trips, hiring quotas, and non-essential spending.
3. Ask for Loans from Lenders
Some businesses will be able to seek financial relief from banks, credit unions, and similar lenders, depending on whether the owners qualify for a loan. Some lenders will allow the business to suspend payments for a period of time. Ask around to see what your lending options are.
4. Reduce Prices from Suppliers, Vendors, and Partners
This stressful time may prove to be an opportunity for business owners to review the vendors, suppliers, and partners that they work with. There could be some cheaper options available, and now is the time to shop around for those.
5. Shutdown Utilities
Some business owners have been able to reduce their monthly bills on things like gas and electricity. Pay attention to your office lighting and heating; if there are rooms or buildings where a utility isn’t especially needed, then shut it off. Switching to more energy-efficient methods will help in cutting costs.
6. Have Employees Work Remotely
Remote work isn’t just for social distancing purposes; a business can save money by having employees work from home. The workplaces will not be spending as much money on energy, utilities, and cleaning services if employees are working at home.
7. Plan for the Business Recovery
While coming up with a business recovery plan, it’s important that the owner is able to adapt to the newer conditions. This process will involve finding out what changes need to be made in the long-term.
How DCI Software Can Help Your Small Business
Here at Direct Care Innovations, we provide consumers with the tools needed to efficiently run their organizations. In addition to payroll tracking and accurate billing tools, our services include scheduling, authorization management, and much more. DCI’s goal is to transform the way people do business for the better. Interested in learning more about our company & services? You can request a demo from Direct Care Innovations by filling out this form. You can also contact us at (480) 295-3307.
.Tags: Budget, Cut Costs, Cut Expenses, dci software, Reduce Expenses, Save Monday, Small Business