9 Ways Your Business Can Profit During A Pandemic
When Revenue Sources Are Scarce Mine For Profit
It’s 100% Profit
You might be scrambling to figure out ways to make money while your business is closed or at reduced capacity, but have you considered ways to save money?
Why is saving money more important than figuring out ways to make more money? Think about it; every dollar you make may only result in 15 cents profit at the bottom of your financial statement. But every dollar you save goes directly to the bottom line.
It is ALL profit.
Ah, now you get it. Sort your profit and loss statement from last year with the largest expenses on top and the smallest on the bottom. The top is where the biggest gains are made — start there.
Here are nine ways to save money during a pandemic or any dire situation:
1. Reduce Payroll Expenses
If you are closed or forced to reduce capacity due to the pandemic, you probably were forced to lay off some or all your staff. Before you reopen, conduct a forensic analysis of your staffing needs. Ask yourself some poignant questions.
Is there anyone on my staff I would not hire if they came looking for a job today? If yes, why bring back that person? Now is the time to clean house.
Can you reduce hours without compromising service? Every hour reduced saves hundreds or even thousands of dollars annually. If you have multiple locations, can you consolidate into fewer locations?
Are there any positions that can be combined or eliminated? Do you contract for services, like janitorial, bookkeeping, and landscaping? Can any of those services be moved in-house without increasing the net cost? Can you reduce the frequency of those services?
Pro Tip: Ask this question about everyone on your staff: “Would I hire them if they walked in the door today?” If no, you should set them free to find employment more suited for their skills and temperament. Your remaining superstars will be grateful.
Check out Recruit, Hire, & Retain Superstar Part-Time Employees on Amazon for more little known ways your small business can find, employ, and keep more qualified, competent, motivated people.
2. Negotiate Your Rent
Commercial real estate is going to see a significant increase in vacancy these coming months and years. Start the conversation with your landlord about reducing rent per square foot and the amount of leased square footage.
Pro Tip: Hire a consultant if you don’t feel competent or know where to begin. A leasing consultant once saved us $168,000 with a favorable termination clause that we ended up using.
3. Shop Your Utilities
You might not know this, but in most areas, you can choose a different energy provider. Search online for energy providers in your area and make them bid on your business’ energy needs.
Pro Tip: Energy rates are great right now. Consider locking in a long-term contract with your energy provider.
4. Shop Your Credit Card Processor
If you accept credit cards shop around for another credit card processing company. A one percent savings in fees will save $1,000 per year on every $100,000 in credit card sales. A $1,000 buys a lot of potatoes.
Pro Tip: Upgrading your credit card processing equipment to tap and chip readers could save you on transaction fees.
5. Cancel Ineffective Advertising
If you don’t know if your advertising is working you might consider canceling it or at least refocusing those resources to advertising campaigns you know are working.
Pro Tip: Shop your providers. We switched our point of sale system to gain more functionality and reduced the cost of the integrated marketing tools at a savings of $140/month per location. Being closed made it the perfect time to make a major switch like this.
6. Reduce Your Tax Burden — Legally
Many small businesses miss legitimate business expenses, like a business cellphone, home office, and business use of a personal vehicle. Stop using your personal cash and credit cards for business expenses. Dedicate separate accounts and credit cards for business use.
Pro Tip: Consult your tax accountant for legal opportunities to save money on taxes.
7. Save On Office And Cleaning Supplies
If you are using a janitor and office supply house that delivers your supplies, you are probably overpaying. Get a club membership, like Sam’s Club, or order online to save a bundle on supplies and have them delivered to your doorstep. Consider technology that will make your business paperless or more paperless. You’ll save on paper and printer ink.
Pro Tip: Amazon is not always the lowest-cost provider. Buyer beware.
8. Install Smart Thermostats
Properly installed and configured smart thermostats can pay for themselves in a few months. After that, it’s all money in the bank from utility savings. Smart thermostats can recognize usage patterns and automatically maximize your utility usage for optimum savings.
Pro Tip: I would consider any brand before Nest. The cost is often more than double, killing your ROI. You also have to consider whether you plan to get related products like security and automated entry systems.
9. Cancel or Reduce Subscriptions
Netflix, Hulu, mobile carrier, cable TV, Point of Sale software, Spotify, and QuickBooks are just a few of the numerous subscription services a small business acquires over time.
First, identify everything that is automatically billed to your business checking and credit card accounts. Next, cancel services you don’t need to run your business. As well, many providers will lower your rate just by giving them a call with a desire to switch to another provider or to cancel.
Finally, see if there is a reduced version of the service. Many businesses have bundled deals with cable providers, but don’t need everything in the bundle. See if your service will be cheaper unbundled and with reduced services.
Pro Tip: Look for unexplained charges on your business bank statements and utility bills. I’ve had employees unwittingly agree to random expenses on behalf of the business.
“A penny saved is a penny got.” — Benjamin Franklin, 1758 Poor Richard’s Almanac
A Penny Saved Is A Penny Got
You may not be able to control your revenue stream during a shutdown or slowdown. Before you give up and shutter your business, mine for profit hidden in your financial statement. It’s the proverbial belt-tightening that could be the difference between making it or breaking it during this pandemic or any dire situation.
