Once you have assessed your regular expenses, take a look at your fixed and variable expenses. Fixed costs typically are not as flexible as variable, but you can still see where you may be able to reduce them by even 10-20% or defer for a few months. Variable costs should be limited down 80%.
After the lockdown is lifted, we will likely see an even more stressful period for small business owners. Suppliers, vendors, landlords, and banks could potentially demand their money immediately. As a small business, you must be prepared for this shock and work to negotiate new terms now before it is too late.
Here are a few business strategies to start thinking about now, before the economy reopens and returns back to normal:
First, take a look at your talent. Create a balance between layoffs, terminations, and furloughs. Continuously work to reorganize the structure of your business to build the most effective team. Set objectives for remote working, and ensure your workforce is being as productive as possible. Most importantly, be transparent with your workforce, inform them of salary cuts, no incentives, and soft payouts.
Next, consider where you can find additional revenue streams. Use sales and marketing to your advantage and be creative with how you create revenue. You can add new products, offer delivery services if you are a restaurant, or sell online learning opportunities.
Lastly, consider your goals for the next quarter. Your goals from the beginning of the year are likely not feasible anymore. Reconsider where you can succeed and how that is going to happen. One way to plan for the future is cash flow forecasting. At TGG, we created a Cash Flow Forecaster to help you consider all potential future scenarios for your business.
Contact us for more information on how to plan ahead for your company’s success.