COVID-19 may remain around for a while, therefore it's critical to identify ways to cut costs and operate as efficiently as possible in the short and long term. Here are a few ideas to help you save money and keep your cash flow positive.
Reduce or Eliminate Office Space
The cost of office space might be enormous. If there haven't been any major drawbacks to working from home during COVID-19, consider making remote working your new normal—at least until the epidemic is over. Even huge corporations are allowing all or portion of its staff to work from home on a regular basis.
Cut Down on Business Travel
Conferences, trade exhibitions, and other business events may have been a regular part of your annual business calendar in better times. Examine how you can move your networking and professional development to the internet exclusively in the current atmosphere.
Negotiate Better Deals
Examine your supply chain for areas where you may save money. Can you, for example, buy materials in bulk if you have the necessary storage space? With your suppliers, distributors, wholesalers, manufacturers, and other suppliers, you may be able to negotiate lower prices or payment terms. Because it benefits their cash flow, several businesses give incentives for paying early.
Streamline Your Marketing
Most businesses need marketing to succeed, but it doesn't have to be in the form of glitzy print brochures and high-priced print and radio commercials. Making every marketing dollar count requires a regular examination of what works and what doesn't, and a focus on what delivers the best return on investment.
Holding too much inventory raises the likelihood that the item you believed would sell is now taking up valuable warehouse space and costing you more money than it was purchased for. Inventory reduction is the essence of lowering inventory costs. The fewer things you have, the lower your expenses will be.
Implement a headcount freeze
Assess critical manpower and redistribute workload among available resources while deferring hiring new personnel. Instead, hire wisely in areas that will support the core business and its profitability in the near and long term, before moving on to long-term solutions. Bring work in-house, Let go of contract, temporary employees, and even external agencies by bringing the work in-house where possible. This protects the jobs of permanent employees first.
Explore collaboration with partners
Collaborations on mutually beneficial services, where organizations might look for new methods to collaborate. Collaborations can take the shape of bundling multiple services to sell as a package, or granting discounts to partners with every purchase from your company.
Implement a shorter work week
You can implement a shortened work week, but it should not continue more than three months and should not exceed three days each week. Employees' wages and benefits are prorated accordingly. However, such selections must be carefully evaluated because unmanaged expectations can lead to undesirable sentiments.
Schedule employee no-pay leave
Instead of laying off staff, you might ask them to take no pay leave or use up to 50% of their paid yearly leave during this time. Employee retention, rather than layoffs, will help to mitigate any bad employee attitudes that may arise as a result of this deployment.
Freeze salary and benefit
When your firm is going through a hard patch, it makes no sense to put further pressure on the bottom line. Remove bonuses, raise salaries, postpone non-essential equipment upgrades, and put workplace amenities like team building events on hold. While not ideal, when contrasted to layoffs, this is a necessary action that should be addressed first.
Innovation can help you reduce waste in your business and leave you better positioned to focus on the long-term goals, rather than always putting out fires. That can bring a host of benefits—lower costs, better profit margins, improved customer service and increased competitiveness.
Try to sell on cash even if you have to give cash discount. Rotation of cash flow is far better than giving 90 days credit which will eat your app. 3~5 % of the profit.
You borrow less
If you spend less, you need less working capital. Remember money cost you top. In form of interest
Don’t overlook this expense, at times can be quite significant and save you from many problems if you intelligently saving energy.