The world has completely changed in the past few months because of the coronavirus pandemic. Among other things, businesses have been significantly affected. Companies everywhere are trying to find their feet in the new financial landscape, but most are stumbling because they can’t sustainably afford their overheads without any income. Overheads are the inevitable expenses that come with running any business and include paying rent for premises, utilities like gas and electricity, telephone bills, cost of employee travel, insurance, ectara.
While we wait for the world to recover from the storm that is COVID-19, here are several things leaders can be doing to reduce their overheads and keep their businesses going for the future.
Downsize Your Premises
One of the biggest expenses of running a business is renting your premises. This can cost employers hundreds or thousands per month, alongside the utility bills that accompany any property. In normal circumstances, these overheads can be justified by how much money is being brought in, but in a post-coronavirus world, this may no longer be the case. The practice of social distancing will likely continue beyond lockdown so businesses can expect a lot less footfall in their shops and office spaces to go unused in favour of remote working. Therefore, renting your premises may no longer be cost-effective. In this case, we recommend that business owners downsize and elect to work from home instead.
If in need of somewhere to store the contents of your old premises in the meantime, companies like Safestore offer several options for business storage with their units. Not only is it cheaper to rent a storage unit, but contracts tend to be more a lot more flexible and you don’t incur utility charges as you do with business premises. So, for someone looking to reduce their company overheads, this is a good place to start.
Insurance and Utility Bills
How businesses are operating is changing because of coronavirus and so insurance policies and utility costs that were once applicable to your company may no longer be. For example, if your business is exclusively operating remotely, then the property damage insurance for your office has now been made redundant. There’s also no point in paying a standardised gas bill when you’ve not been inside the property for months. Furthermore, providers may start hiking up their prices following on from COVID-19, as the virus has already wreaked havoc on the oil industry. These are factors worth considering when trying to reduce your overheads. See if you can negotiate with your insurers and providers to find a solution that keeps everyone’s businesses going.
Have you considered what the government can do to reduce your overheads? Though it feels like the world has come to a grinding halt, it hasn’t. The government wants to keep businesses afloat and people employed so the economy can flourish once lockdown has finished. As such, companies can furlough their workers and have the government supply 80% of their employees’ salaries, which in turn reduces their overheads as they no longer pay labour burden. There are also other schemes available to companies and the self-employed, such as a £10,000 grant to help small businesses where they might be struggling to make ends meet. Therefore, do some research into what the government is offering to help reduce your overheads following on from COVID-19.
Though the current climate has everyone filled with trepidation, the world will right itself in the end. In the meantime, combat your fears by being proactive, have faith in the goodwill of others, and you’ll find your first steps into this new world will be successful.