In a recent survey conducted by Goldman Sachs and completed by over 1,500 small business owners, 51 percent of survey participants said their business will only be able to operate for up to three months if the COVID-19 trajectory continues.
During these difficult times, efficiently managing your cash flow is one of the best strategies you can employ to keep your business running.
Due to the ongoing global health hazard of COVID-19, the nature of your business has changed, and it’s essential to shift your spending mindset to reflect that.
Identify the path of your cash flow and pinpoint your top line expenses
Carefully assess all your business’ expenses. Consider where your money is allocated on a daily, weekly, and monthly basis. Once you have identified where your money is going, categorize and rank your expenses—make sure you pinpoint every source you are putting your money into. Detect the expenses that are essential. This could be rent, employees’ pay, and the goods you purchase to produce a product. For everything below the essential expenses, it’s time to consider a game plan for cutting or replacing these items.
Cancel any unnecessary subscriptions and expenses
Not sure where to begin cutting expenses? For starters, don’t rule out the smaller items on your list. Small subscriptions and personal expenses, such as gym memberships and streaming services, add up. Perhaps you can suspend any news or music subscription utilized by the office.
See if you can replace a paid subscription with a service that is free during this COVID-19 containment period. Many larger organizations see the impact COVID-19 has already had on small businesses, and they are offering free or discounted tools and resources to help small businesses make it through these tough times.
Get in touch with your credit card holders and lenders
Pick up the phone and get in contact with any credit card holders, lenders, cellphone providers, or anyone you are required to pay on a regular basis. Explain your current situation and ask what your options are. Can you get a higher credit limit or reduced interest rate for the next few months? These are questions worth asking. Reaching out over the phone will provide that essential human-to-human contact.
As you ask for these favors, remember that you are not alone in experiencing the impact of this pandemic. Many organizations and individuals are doing what they can to make sure we all stay above water. We are all in this together — and we will rely on one another to get through this.