Since the COVID crisis, businesses have shut down while others are barely staying afloat. Here are some tips to you get through these trying times.
A business will always be looking to save cash. They may need to spend it in certain areas to ensure that there is an element of growth in the business or invest in new equipment or staff, but in the main, a business will always be looking to save cash in all of its areas of operation. Reducing overheads when possible ensures a better cash flow, with more money to invest, or simply more money in your pocket. Since the coronavirus crisis, many businesses have shut, forcing some out of business entirely while others are barely staying afloat with whole workforces made redundant. Businesses are looking to save cash more than ever before and with a potential financial crisis looming it seems most prudent to really drive for savings before things get even worse. A financial crisis won’t kill all businesses, but it will make it a lot harder to trade. Here are some tips on how you can save some money at the moment. Think ahead and try to anticipate what you’ll need to do to ensure your business survives.
Try To Cut Back On The Big Overheads
Start with those that cost you the most money. Again, businesses are all bespoke and completely unique, meaning although you might be in the same trade as another business it could be financed totally differently so you need to ensure you focus on yourself and not look at what other people are doing. A mortgage is one of the biggest overheads most businesses have. Especially in their early years. Cutting back on this will mean huge savings. Interest rates are very low at the moment so you could end up getting a good mortgage rate. Businesses like Altrua can help, but you need to do the research yourself. Speak to brokers and your current provider. You might already be tied up in a deal, but if you’re not, or if you can refinance you could take advantage of the low-interest market. Be careful though. You might have to pay a penalty to get out of a deal that might not be worth it. If you operate vehicles you might want to give some back or even sell them. They’re expensive to maintain and if you haven’t paid them off or if you’re leasing them giving them back makes sense. Primarily because you might not be using them, but also because it’ll save you money.
Check The Help That’s Available
There is a lot of help out there for businesses at the moment. Make sure you check it out and see if anything is applicable to you. These can come in the form of grants, or cuts, or perhaps you can get help paying your workforce so that you don’t have to. Anything is worthwhile and can really help you but you won’t know about it until you do the research needed. It could be the difference between staying in business or going bust so make sure you have a look and do the research you need. Don’t look in generic terms, look in specific industry terms to see what’s available out there.
Be Tax Efficient
Streamline your business to ensure you’re tax efficient. You will be able to pay less tax if you do this properly. As long as it’s legal there’s no problem and you can bet your competitors and other businesses are doing it too. If you can, hire an advisor. They may cost money, but you can save even more by using them. They may know of tax incentive schemes or grants you could be entitled to and will know the best way to structure your business. If you can’t afford this, then look online and do the research yourself. You may just be pleasantly surprised at what’s out there.
Cut The Workforce Back
This is one of the last resort items and probably the hardest thing to do. You don’t have to fire people or make them redundant. Instead, consider giving them extended time off without pay. Some might even volunteer for it depending on the circumstance. You can even furlough your staff, and depending on where you operate you could end up having your wages paid for you by the government. This will only be short term, but it can be enough to see the crisis through. If worse comes to worst, this is what you have to do to ensure your business survives. Better do this and rehire, than keep people on, payout a load of money, and sink later down the line.