With the ever struggling circumstances of the COVID-19 pandemic, it has led to thousands of businesses struggling, or even closing down as a result of the virus. In this article, Forbes Burton is here to provide some simple tips and advice that can help you save business expenditure, and overall help your business potentially thrive.
Do You Know Why Your Business Is Struggling Financially?
As a business owner, you may have numerous questions you keep asking yourself –
“Can I meet the bill deadline?”
“Can I move an extended budget into another investment?”
“What can I do to keep my business alive?”
If you are realistically asking yourself these questions, then you know your company is having issues with its finances, which is why you now need to focus on what that means for your company and how you can make the right changes to take away these fears.
Tips That Can Help You Save Money
Cash Flow Reports
It is important to keep control of your daily cash flow, to see where the main reduction in your costs are leading to, and can even help protect you from wrongful trading
Checking your cash flow daily can help you analyse the trends of your ingoings and outgoings and can especially help you see where your unnecessary costs are going towards and if these can be changed.
Approve Payments
As a business owner, you should be the person that approves every outgoing, especially if your business is struggling financially.
If you are unable to approve every outgoing, then at least make sure that you are aware of the approvals made by your team leaders. Plus, you need to make sure you are the one signing the cheques and approving all BACS/CHAPS payments.
Petty Cash
Many of us don’t realise how petty cash can increase more and more as time goes on, and can actually be an outgoing that no one keeps an eye on.
If anyone in your business is looking to take out petty cash, then you need to make sure you know why they are spending it and what the overall cost will be.
Also, if you are finding that your petty cash is becoming unorganised and a real problem to your business expenditure as it is not being monitored, then you could simply change the rule, so if anyone needs it, then you need to personally collect it from the bank.
Using this technique will then reflect on how important the use of the petty cash actually is, and you will be more likely to question and negotiate the price and reason for using the money, if it’s for the right reasons.
You Are Here To Survive
To let your business survive, you will need to make tough decisions, but don’t back down on what you think is the right choice.
If you lose people or profits that are not the most vital, then do not worry. Your profits will soon be in optimum flow again as you change to using a tight cash flow management system.
Supplier Outgoings
A win that could change the whole perspective of your business outgoings.
Asking every single one of your suppliers for a review of their prices can result in you potentially getting a better deal. You can also ask them if they are able to offer a few extra weeks grace, or a change to the timings you pay, so monthly, or bi-monthly.
See If Your Landlord Can Help
During these uncertain times, many landlords are extremely keen to retain their tenants, so it is always a good idea to ask for a breather with the rent for a while, rather than on the timing basis you are currently paying.
Also, if your business building is potentially empty during the lockdown period, then you could consider stopping payment towards your business space temporarily and explain the situation to your landlord. If not, they might be able to significantly reduce the cost whilst it is not in use.
Advice
Why not receive a view from someone else’s perspective? It could be a trusted friend or mentor.
Talking to someone you trust and someone who is aware of the situation from another perspective can help you open your eyes to potential opportunities to help save costs and what the next steps should be for your business.
Sell Unnecessary Assets
When looking around your business premises, you may find that you have assets that are not even needed, so why not sell them to raise cash?
Although, do make sure they are NOT owned by a leasing company beforehand.
DBIS (DTI)
If you are looking to make staff redundancies but you cannot afford them, then find help in the DBIS (DTI) Hardship Scheme.
The Only One That Can Save The Business, Is You
As the business owner, you are the only one that can massively contribute to saving your business
If you are determined to save your business, then work all hours possible to build up your recovery plan (but do pace this, and don’t go to the extent of extremely overworking yourself.)
Never Leave An Idea Behind
As you are working closely with your business, you may find good ideas or decisions that you could make towards your action plan, and it is essential that these ideas are not forgotten.
Take the moments to simply note down these ideas and brainstorm them when you can, as this saves time in the future and stops you completely forgetting your ideas that could help contribute to keeping your business alive.
No Matter The Business, It Is No Different
No matter the size of your business, this process is the exact same.
Using techniques like these have actually contributed to saving businesses, with the next one potentially being yours if you implement these ideas.
During this time, effectively manage your cash flow, keep the people who are essential for your business and use your ideas to help lead your business out of the dark times.
