Whether your small business recently reopened after the forced COVID-19 shutdowns or you have been open for business for a while, there’s no denying that you now work under a different financial reality. Since lack of positive cash flow is one of the leading causes of business failure, now is the time to focus on building stable revenue sources once again. Below are several tips to help you reopen your business effectively from a financial perspective.
Rework Your Business Budget
Living with limited or no revenue during the shutdowns was challenging enough. Now that your small business has reopened, you suddenly have additional expenses you never had to consider in the past. Plexiglass shields to protect employees who serve the public is just one example. Making room in your budget for these new expenses makes it necessary to rework the budget your company had in place prior to the coronavirus pandemic.
When reviewing your budget, look for the most obvious areas where you can cut costs first. Start by eliminating anything that is not essential to keep the doors of your business open and allow you to serve customers. For example, a monthly employee lunch at company expense is a nice gesture but may not be the most practical thing right now. Although some employees may feel angry about losing perks, most will understand when you speak to them with transparency.
Don’t forget to review each of your monthly expenses and then reach out to service providers to negotiate the best possible deal you can with them. If possible, cancel subscriptions that are nice but not critical until your business revenue returns to pre-COVID levels.
Create a New Cash Flow Forecast
Predicting your company’s cash flow for an entire year like usual isn’t necessarily practical right now. We recommend creating new cash flow reports one quarter at a time until you have a better idea of what the economic recovery will look like. Monitoring supply chains and inventory is especially important post-shutdown to get a clear picture of delays and price increases that affect your company’s ability to serve customers. You can then take these reports to your accountant or bookkeeper to get a clearer picture of your current financial reality.
Don’t Stop Marketing
Planned marketing campaigns are often the first thing on the chopping block when companies suddenly need to reduce expenses. However, this can be a costly mistake. While you may need to spend less to advertise your business, you don’t want to forgo it altogether. Look for free or inexpensive ways to get your message out there such as social media posts, blogging, or earning free traffic through search engine optimization.
You may also want to consider reaching out to your current customer base to see what you can do for them. If you operate a physical location, keep in mind that not everyone will want to return. Surveying your customers to understand the options they need to continue patronizing your business will help to keep the revenue flowing in this challenging time.
Partner with Us to Get Back to Business
Palmetto Payroll Solutions serves the small business community in Columbia, South Carolina and the surrounding areas. We invite you to learn more about our services and then contact us to request a consultation with a small business advisor.