Back In Business: How SMBs Can Reopen While Cutting Costs
SMBs need to assess their finances and operational needs to successfully reopen. Here are 3 ways you can cut costs to fund your core business activities.
Many small business owners are planning their reopening strategies as states start to ease lockdown restrictions. With the Coronavirus still running rampant, businesses are thinking of how they can resume normal operations while following social distancing and strict hygiene protocols.
The biggest obstacle most businesses are facing as they plan to reopen is financing. Even those that managed to remain partially open during the community lockdown took a hit to their revenues. This makes it difficult for them to sustain the same level of operations they had before the pandemic.
Make a thorough, honest assessment of your operational needs. Look at your finances and figure out the bare minimum you need to restart your operations. This means letting go of certain expenses and allotting them to your core business activities.
Below are three ways you can reduce operations costs as you reopen your small business.
Explore Alternative Staffing Strategies
Many businesses had to furlough or lay off employees during the height of the pandemic. If you’re one of them, it’s likely that you won’t be able to hire them all back right away. Assess your manpower requirements and explore various staffing alternatives.
One staffing strategy you can consider is part-time work arrangements. You can reduce employee hours per day or limit the number of working days in a week. This setup allows you to cut payroll expenses without losing top talent.
Another option is outsourcing. You can outsource certain positions that you can’t afford to hire yet. Offshore digital marketing such as social media, PPC, and SEO outsourcing services are highly beneficial for small businesses during the pandemic. They help you reduce payroll expenses while boosting your online visibility.
Downsize Your Office
Rent can be one of the biggest expenses for any business, which is why many businesses are downsizing into smaller offices. Since your employees won’t be reporting to the office five days a week anyway, you can relocate to a smaller space with a more affordable lease. Look into commercial spaces with flexible terms, giving you more manageable monthly payments.
Staggering your shifts and keeping a hybrid home-office work arrangement also enable you to downsize your office. Having your employees work in shifts or from their homes means there’ll be fewer people in the office, so you’ll need less space to accommodate them.
Remote work arrangements also let you save on energy, utility, cleaning, and equipment costs.
Be Strategic With Scheduling
Finally, work out an operation schedule that works for your business. Retail stores, salons, restaurants, and other brick-and-mortar shops can enjoy the following benefits from this strategy:
- You’ll have time to disinfect your space and equipment.
- You can plan ahead for your staffing, stocking, and cleaning needs for later in the day.
- It’s easier for your business to stay within capacity limits as mandated by local authorities.
- You can close your shop during slow business hours, letting you save on energy expenses.
Before cutting costs, make sure to create a cash flow projection to identify how much you need to save to reopen successfully. This will help you make wise, data-backed financial decisions that will let you reduce expenses while retaining valuable assets that enable your business to function.
You can also look into loan and financial assistance programs for small businesses to secure funding for your reopening.