How To Save Costs During This Pandemic
In these hard times it may seem like all you are doing as a business is spending money whilst nothing is being earned income wise.
Here are a few things you can do to try and save costs to stay afloat until you are able to get back on your feet. Cutting your business’ three major costs will be the best way to ensure your survival. For most businesses, these costs may be as follows:
Rent - This may arguably be the most fixed and expensive cost for most business right now. Your office space or place of operation may be idle now, but you are still required to pay rent. It would not be a bad idea to ask the landlord for a reduced rate depending on your current business operations. Make sure you know your rights in terms of your rental agreements, ask your lawyer or accountant for assistance in this regard if you are unsure about your force majeure clause.
Employee cost - In order to keep your key staff, you may need to consider cutting salaries and/or offering unpaid leave to them. To try and sustain business survival some tough choices will need to be made and sometimes this will be at the expense of your beloved employees. However, before this approach is adopted make sure that you have taken advantage of the UIF TERS benefits available to help fund your employment costs. This relief is indicative of the facts that once again it helps to be complaint with the UIF registrations and payments as only businesses that are up-to-date with their UIF payments can qualify.
Other consumables - These costs can include miscellaneous expenses where you have not really seen any changes or much impact over the last year. This may look like IT support, subscriptions to certain publications etc. Every rand counts during this time and these costs do add up especially during this time where you cannot afford to be paying out more than you are getting in. The best way to identify unnecessary costs or trends in cost increases is to ask your accountant for an expense analysis for the past financial year as compared to the previous financial year.
Bonus tip - Although it may not seem like it, this is not necessarily the time for you to be cutting back on your advertising costs because like it or not this may be the only way you will be able to find new customers during this time and lets people know that you are still operating. Similarly, your professional costs paid to your accountant and lawyer are not “luxury” costs, but rather the most beneficial way to spend any extra money you have available. Money spent on these services is likely to save you significant amounts in tax and prevent your business failing by making uniformed financial decisions. Ask your suppliers of these services for payment arrangements or discounts to assist you in these cash-strapped times.