Proper financial management becomes increasingly essential during times of economic disruption and crisis. As a small business owner, you’re not only well qualified to understand the underlying drivers of your revenues and expenses, you may also have the flexibility to control them and make course corrections as situations evolve.
Ways to Reduce Overhead
Landlords & Property Managers
Carefully review lease agreements for clauses related to force majeure closures, cessation of landlord services, government interventions, property condemnation, or other major disruptions. Given the shared impact of a major disruption, most landlords should be reasonable. Try to forecast the short, medium and long-term impact of a disruption to your business. Be direct in your ask and flexible in your negotiations recognizing there are levels of assistance—from lease abatement to deferment to reduction—all of which can be used to bridge payment gaps. Business insurance policies should have language pertaining to major disruptions and their eligibility for claim submission.
Vendors & Service Providers
Proactive communication with key vendors and service providers can offer financial relief during disruptions. You may be able to negotiate longer payment terms (e.g., Net 45 payments vs. Net 30) to normalize expenses, as well as reduce some of the services you consume (e.g., reducing office cable/internet package).
Government Assistance Programs
Local, state, and national stimulus packages, when offered, can provide additional economic relief. Leverage your local business relationships (banks, accountants, attorneys) as well as small-business associations and chambers of commerce to stay abreast of government assistance programs.
Your Own Self-Governance
As a small business owner, you ultimately control expense management by overseeing the financial actions of your organization. Having a budget allows you to track critical financial metrics and determine when to make changes. Disciplined project management can keep you on track toward goals, while communicating them to your employees can drive alignment with your initiatives and clearly define success.
Ways to Reduce Staffing Expenses
Short Duration Tactics
We can always set up some time to discuss further if you have any questions. Please do not hesitate to reach out.
For discussion purposes only and in no way represents legal or tax advice. For advice regarding your specific circumstances, the services of an appropriate legal or tax advisor should be sought.
Top Expense Management Tips During a Crisis
June 16, 2022