Because of the Coronavirus pandemic, small or large businesses have faced some financial obstacles. You can read more about how to alleviate the current economic condition in this article.
Avoid useless expenses
Now is not the time to invest money. Save money and do everything you can to avoid unnecessary expenses. This is especially true for retail businesses – for example, shops, restaurants and bars. Creditors may be less likely to act on these types of businesses, which means that costs need to be reduced to easily deal with the current situation.
Make the right decisions about the shots
Looking at cash balance can help you understand your business temperature. How much salary you will be able to finance in case of income depletion. Employees are your most valuable asset, reducing them may seem like an inevitable conclusion, but you still need to consider alternatives. Before cutting salaries, think about whether you can reduce working hours instead. Asking someone to work for a lower wage over the same time increases dissatisfaction and reduces productivity. This approach will have the same financial impact, but will help move to more productive, agreed-upon changes. Other ways to reduce labor costs include eliminating overtime, volunteering for retirement, and temporarily halving full-time staff.
Negotiations for better tax conditions
Contact your suppliers by phone to discuss broad payment terms – especially with large retailers whose revenues are much higher than those of medium market companies. Accordingly, the amount in your bank account will be maintained for an additional 2 weeks, which is a lot to say in such a situation.
Another option for discussing discounts. If your supplier does not extend the terms of payment, you may be able to get a small discount if you pay early. In many industries, there is a one or two percent discount on payment within 30 days instead of 30 days.
Not all suppliers will be able to meet this requirement, but those who make this concession will understand that this is a way to ensure a long-term partnership and avoid a canceled contract.
Collection of payments
When the economy is booming, delaying invoices for a few days is not always worth paying attention to. But now, there is no such time, because the amount you can’t get is likely to be taken by another collector who is more demanding on such issues.
Remind the client of the penalties they may face by your company’s policy for late payments. Through direct, open discussion, you can better understand the reasons why the payment was delayed. This will make it easier for you to find a way to avoid such things in the future.
It is difficult to keep your business afloat during an economic crisis, but it is possible to do so. Setting realistic goals, taking a cautious approach to all decisions, and communicating openly with employees and partners can help you do just that.