As the COVID-19 crisis continues to bite, numerous businesses are adversely affected. In hopes to curtail the spread of the virus, circuit breaker measures have been implemented. Not only do businesses have to cease their physical operations, but their only viable option is to move their business online. Profits will undoubtedly drop significantly and one of the things you will need to salvage your net profit margin is to ultimately find effective ways you can cut cost. Here are approaches to consider if you wish to cut down your business expenses and flatten your costs curve.
Review Your Short Term And Long Term Budgets
The global pandemic has blindsided most of us and many of us had a hard time adapting to the situation, considering how fast the situation unravels. To cut your expenses as quickly as possible, it may seem like a good idea to slash your expenses across the board. However, doing so might make you vulnerable to competitors who have managed to come up with more effective strategic approaches.
Thus, your first step is to first revise your budgets, both short term and long term. You need to understand where your business stand and its financial capital. You’ll need to have a clear view of your current and future expenses. Having both of these data, you’ll be able to revise your analyses and develop financial trajectories for two occasions: the betterment or worsening of the coronavirus situation. Thus adjust your budgets accordingly and remember to establish a few post-recovery periods.
Removing Non-Essential Expenses
Prior to COVID19, you must have plans to grow your business – whether it’d be including new facilities, state of the art equipment or simply hiring more manpower. Consider doing away with such significant expenditures and perhaps delaying it for a few months.
You may also need to consider freezing your contracts with freelancers and other contractors. Engage in transparent communication with not only your workers, independent or otherwise, but also your vendors. If you need to make big changes during the unprecedented time, letting them know your thought process and decisions are crucial so as to maintain trust. That said, you can also use this period to source out freelancers or vendors who can work with your budget limitations.
Your Main Priority: Cash Flow
Now that your cash flow has dwindled significantly, it’s imperative that you find a stable avenue to ensure that your business enjoys a minimum cash flow to manage operations. This may include having to temporarily freeze your manpower – in the worst situation, let go a few of your workers – and shifting some of your full-timers to the part-time positions. You may also need to delay or cancel a few of the upcoming projects that you deem not essential.
As per the circuit breaker measures, unless your business falls under the essential category, your business operations will most likely have to shift to remote working conditions, if eligible. This will render your office space for rent obsolete, and unfortunately, your office costs will still continue. Fortunately, the Singapore government has offered support measures to help businesses cope with COVID19, including enhanced rental waivers up to 1 month. Thus, keep abreast of any financial help from the government and other organisations.
At Greenhub Singapore, we strive to offer you office services even during such a challenging time. Whilst we know that you will be working from home, our virtual office will allow you to continue maintaining your operations without incurring any financial loss of an unused office. With Greenhub Singapore, your business can now better adapt and manoeuvre through the pandemic.