Things are not looking pretty for business owners during the pandemic. Lord & Taylor, the oldest departmental store in the US, just filed for bankruptcy. Ann Taylor and Lane Bryant, another iconic business that was started in 1962, will be closing more than half of its 2,800 stores.
Thousands of businesses are closing shop, while many others are grappling with mounting debt. One thing is for sure. Only the best-prepared businesses will survive.
If you own a small business, learning how to keep costs low can make the difference between thriving and closing shop. Here are five smart ways of doing just that.
1. Watch Your Fuel
It seems like there’s a silver lining in the COVID pandemic because we have lower prices at the gas pump. But if you have a large fleet, fuel is still a major expenditure item. And it doesn’t help matters that drivers are not always forthright when it comes to fuel. It is also not easy to control and keep track of fuel consumption. This is where fuel cards come in.
But some cards offer more discounts and convenience than others. So how do you choose the right one? You could painstakingly go through lots of websites or use a comparison tool such as Fuel Card Report.
2. Join Relevant Trade Organizations
There are many reasons for networking with other small and more significant businesses in the industry, locally and beyond. For starters, these organizations commission tons of industry research, and members have full access to this data, which can help in decision making.
If you wish to explore new markets, periodic reports can give relevant insights on which markets to venture into, which products to major on, and even the best time to release new products.
These memberships can also help in negotiating discounts and more affordable insurance premiums, which could significantly reduce your expenses.
3. Don’t be Afraid of Technology
Technology is not slowing down, and if you don’t take advantage of it, you might not survive. As such, open your eyes to new ways of doing things which could help you cut costs now and in the long haul. For instance, cloud storage is essential for backing up data and information, and there are many open source options to choose from if you are on a budget.
Lagging or shunning new technologies to avoid spending money on acquisition and subsequent training will only hold you back. For instance, using paper forms to collect data will necessitate storage space and will limit the speed at which you can access information. Use of tablets might make more sense.
4. Encourage Telecommuting for Staff
Sadly, only a handful of US workers have had a job that allows telecommuting. But surprise, surprise! Since the COVID pandemic began, up to 50 percent of employees in the country are working remotely. What advocacy has failed to do in years, the pandemic has done in months!
Even though the outbreak is being contained, telecommuting may be the only option for many. If you are a small business owner, this is the time to get more staff to work from home if your industry allows it. You will need less office space, and you will cut back on utility bills and stuff such as coffee and snacks.
5. Clear Invoices Before Time
Paying outstanding bills before time can save you money through discounts. Some suppliers offer a specific percentage off for clearing invoices earlier. Say within ten days, before the usual thirty-day deadline. This strategy is helpful when paying early doesn’t affect your cash flow.
Find out What Works Best for You
There are many ways of cutting costs for small businesses, but there is no one-size-fits-all solution. Understanding your strategic goals will help you determine which methods work during economic downturns, and once the economy gets back on track.