Prudence in spending is a crucial strategy for businesses to survive during the pandemic. Many industries are already struggling financially because of reduced economic activity. Some companies had to let go of employees and close branches to prevent more losses. Since cash flow is key to survival, businesses have to cut costs to remain liquid for as long as possible.
Deciding which expenses to reduce isn’t always easy. Some essential spending is necessary for businesses to maintain exposure. Let’s take a closer look at the specific examples of how your company can strategize and limit spending in certain areas of operation.
Recurring office supply orders
It’s quite common for offices to have a recurring contract with a supplier for office essentials. If operations are normal, these supplies will likely run out and get replenished as intended. But during the pandemic, most offices had to limit employees coming in for work. As such, it’s also critical to reduce orders for supplies that will likely only go into storage. According to www.aosonline.co.uk, you can either cancel orders or defer them for the future instead. If you have a contract with your supplier, perhaps now is the time to review the agreement and check if there’s a possibility to cancel it and pay on a per order basis.
Similar to office supplies, equipment leases take up a significant chunk of operational expenses. But if your company isn’t drumming up any business during this time, paying for these leases is a massive waste. Instead of waiting until the pandemic is over, you might want to contact your supplier for a possibility to put the lease on hold. If the contract is up for renewal, consider cancelling for now and renewing it later when the business is back to normal.
Parking spaces and other related expenses
If you don’t have as many employees coming to work, you’re likely wasting money on parking spaces. Consider contacting your landlord to negotiate the possibility of reducing payment until such time that business operations can recover. Some landlords are quite understanding and are also willing to put off payment for several months. Similarly, you may want to request for a deferment in paying the lease for your office space. If it’s not possible, perhaps asking for a more favourable payment arrangement would be another option.
Subscriptions and paid services
Service subscriptions with recurring payments such as internet and cable are all essential to business. But you can also cut costs in these areas by considering downgrading your plans in the meantime. Any subscription that isn’t useful at the moment should be deferred or cancelled.
If your business has several events scheduled for the rest of the year, you’ll likely have to cancel them due to physical distancing requirements. In line with this, you might want to review any contracts with suppliers and other vendors you’ve booked for the event. Ask for a possibility to refund deposits and check if you can cancel contracts without paying a fee.