Updated: Oct 27, 2020
As an SME owner, you've spent years building up your business often working long hours and investing all of your energies. Getting through the pandemic will be challenging for most businesses however making necessary cuts to your costs now will help you considerably in the long term.
You need to maintain key costs (these are investments to your business!) to preserve and grow your business however many expenses can be eliminated or restructured in such a way to support your immediate goals:-
(1) Outsource non-core activities so you pay for what you need
Outsourcing is a cost effective means of providing your business with indepth key support without spending huge sums in hiring, training and paying employees. These partnerships provide the support when you need it often by professionally trained experts in their fields. Administration, Secreterial, Accounting, Marketing, IT and HR Services are amongst many areas that be provided on very reasonable terms.
(2) Refinance or restructure loans so you can spread the costs over a longer period
The government has mandated, from the financial community, support to SME business owners. Now is the time to consider your cash positions. Trading is going to be tough so some prudent planning and subtle changes to loan terms will free up your cash flow and provide you with a safety net should things continue to be difficult.
(3) Negotiate better terms with your suppliers
We're all feeling the pain and your suppliers will co-operate because they need all of us trading in a healthy way too. An extension on credit terms, reduced prices and discounts for loyal customers will all help you improve your cash flow and financial health.
(4) Talk to your landlord
The government encouraged landlords to defer and/or renegotiate terms with their tenants in order to keep businesses going and deriving a win-win for all concerned. We've seen many landlords co-operating to support of their commercial tenants. Afterall, everyone wants you to survive and prosper!
(5) Consider changing employee working practices
You've spent years developing your employees many of whom may be experts in their field. Consider offering flexible working practices which will save you costs whilst also providing a safe working environment for them - Studies (*British Chamber of Commerce) have shown that employees often commit more hours and productivity improves whilst working from home. Also if you need to cut back of staffing costs, consider new working practices or involving HR specialists who can help you design working environments that work for everyone.
(6) Remove expenses you do not need
We've all signed up to services that helped at some point however now may be the time to look at all expenses again with a critical eye. Ask yourself do you really need to spend in that area and can you say with certainity what returns you've got back? Often owners have found that they can cut out 20-25% of costs without any significant impact on their business - that's going to give you a huge boost so you can save or re-invest those funds on marketing/growth activities instead.
Whatever your needs may be, it would be wise to be cautious now to prosper in the future. The road ahead is unclear however support is here for those who need it. firstname.lastname@example.org 07397 145793