It goes without saying that saving money is no longer an option for business owners to explore, but a necessity.
But as businesses look to reopen or return to offices, and the furlough scheme winds down, operating costs are undoubtedly going to rise.
Not only that, but businesses will need to contend with strict workplace guidelines, some of which could severely hamper trade. The question then is how long will it take for consumer spend to return to pre-lockdown levels, and for industries to rebuild? And what does that mean for your cashflow in the meantime?
We look at some of the key ways to maintain a healthy bank balance during the next few months of continued uncertainty.
Make sure you reopen at the right time for your business
While it can be tempting to get back to ‘business as usual’ as soon as possible, especially for businesses that have had to close entirely, it’s worth considering all of your options before taking any drastic steps.
If you can continue to operate virtually, it seems sensible to do this for at least a few more months. With so much talk about a potential second peak, and such an uncertain period still ahead of us, this way you can keep stability and predictability in your operation costs at least.
For businesses that had to close, shutting down has already incurred considerable expense, but you don’t want to be in a position where you open up, only to have to close again shortly after.
Getting revenue clearly has to be a priority, but make sure you’re counterbalancing potential income with the costs of restarting. While the furlough scheme is still running, it might make sense to stay closed, or at least slowly phase reopening to spread initial upfront costs.
It’s also paramount that it’s safe for you, your staff and customers.
The situation will vary considerably for each business, so it’s just important to make sure you’re properly planning, and ideally modelling different possibilities.
Get Covid-secure and up and running without breaking the bank
As we’ve already covered, there will be costs in restarting, and in addition to general expenses there will be the price of getting your business ‘Covid-secure’.
The guidelines vary by industry, so make sure you’re prepared for all the changes your business will specifically need to make, and then make sure you factor the costs appropriately.
Research by SmallBusiness.co.uk found it could cost just over £600 to get an average shop Covid-secure. And, of course, it could cost far more, but it could also be less.
You may feel less inclined to shop around and just want to get everything quickly, but approach buying Covid things in the same way you would getting other new equipment. Do your research and compare prices.
While it’s important to not scrimp on essential safety measures, it’s also OK to open in an MVP (minimum viable product) way. Stock may be different, and social distancing measures may impact the usual look and feel. It just might not be feasible to get your business back to the way it was pre-lockdown, at least initially, and that’s OK.
Continue to negotiate with suppliers
When we first went into lockdown, everyone would have evaluated costs and looked for savings. Be that becoming more energy efficient or cancelling non-essential contracts. But you can’t afford to let up on negotiating to make every pound count.
Continue to focus on your supply chain and service providers. In such uncertain times there are definitely deals to be made – and while no one wants to take advantage of the situation we’re in, your suppliers will be better to have you in business than unable to operate entirely.
See if you can agree on a short-term arrangement for the first few months of reopening. Discussing payment terms isn’t unreasonable but just try to take a collaborative and transparent approach.
It’s also important to ensure suppliers are in a position themselves to be able to fulfil your orders. You don’t want to be spending out money on reopening if you won’t be able to deliver what customers want and need.
Keep an eye on your finances like never before
For the last few months, business owners up and down the country will have had many sleepless nights worrying about cash, so we’re sure you have been keeping an incredibly close eye on all your numbers.
But as we slowly start to reopen, don’t lose that laser-like focus on your financials.
It’s likely that your budget will have changed dramatically since the start of the year, with lots of expected costs going both up and down. And it will continue to do so.
You may need to invest some additional money in marketing and communication, telling customers that you’re planning to reopen, and what to expect will be paramount. But try to figure out the most cost effective way of doing this, social media can be particularly helpful at the moment and can cost just your time.
Even if trade starts to pick up, still aim to keep lean and remain cautious.
The key is to plan for what you can, keep costs as low as possible, and be prepared for a new way of running your business. There will no doubt be some challenges, but hopefully some great rewards too.
