Managing business expenses is always a challenge. During the coronavirus pandemic, however, business owners have had to figure out how to stay afloat with little to no new revenue. Tough decisions are par for the course right now, but that doesn’t mean they need to be painful. Your business can recover with some discipline and planning. The company may not look or operate the same as it did pre-pandemic, but the important thing is that you weathered the storm.
Reconsider Business Expenses to Determine Essential and Non-Essential
You can’t change or reduce some business expenses, such as payroll, but you may be able to negotiate others. For example, if the lease for your office space is about to renew, get quotes from a few other places to see if your current lease holder can offer a better deal. You would be surprised at how many might be willing, especially if you have rented for a long time and the office rental company doesn’t want to lose your business.
You may find that other expenses your business incurs are for items that are nice but not necessary to have. The huge sign that welcomes to customers to your business, monogrammed coffee mugs for every employee, and buying lunch for everyone who attends meetings are just some examples.
Your employees will no doubt have a lot of work to catch up on if your business closed for any period during the pandemic and they couldn’t work from home. Rather than paying overtime for hourly employees, consider hiring a few freelancers or temporary workers to help catch up on the work instead. You only need to pay for the duration of the project, which typically means a flat rate plus some expenses. Since employee benefits are not part of this equation, you can save a significant amount of money.
Operating on a lean budget isn’t always easy, but it’s a great way to teach your employees discipline along with gratitude for when things are going well. Please schedule an appointment with GP Solutions to discuss additional tips for reducing business expenses.