Impact of COVID-19 on Small Businesses: Operating on Reduced Budget

When businesses had to close shop at the onset of the pandemic, they didn’t expect lockdown and physical distancing restrictions to go on as long as it has. These health and safety protocols, while reducing the risk of contracting the virus, have nonetheless heavily impacted the economy. Businesses incurred millions in losses, and those that have managed to stay afloat despite these losses had to quickly learn how to operate on a reduced budget.

If you’re struggling with your budget and you don’t know of any other way to reduce your operating costs, here are a few suggestions you could look into:

1. Reduce overhead costs

One of the biggest expenses of any business is overhead cost. There are several ways to significantly lower your overhead costs without having to let some of your employees go. First, you can continue with work-from-home arrangements, fully or partially. If partially, you can schedule remote work on rotation so all your employees will get a chance to work remotely at certain days of the week.

2. Don’t hire new employees yet

As you begin to slowly recover from the pandemic, you might find that you need more people on your team, which will naturally increase your overhead costs once more. Instead of hiring new staff for your front desk or for taking care of order entries, dispatch, customer calls, and such, consider outsourcing these tasks to an outside provider. Outsourcing is a cost-effective way of handling important tasks in the office since you won’t have to factor-in wages and benefits into your monthly expenses.

Once you’re back on your feet, and you feel that new staff is really what you need to cater to your growing clientele, then you can put hiring new talent back on the table.

3. Let go of departments or partnerships that bleed money

Since you’re going to be operating on a reduced budget, you need to identify areas in business that bleed money. These could be departments in your organization or partnerships with vendor or suppliers that will no longer serve the business because of the changes that emerged from the pandemic. Remember however, to sever ties as amicably as possible. In business, it’s important to keep friendly relations with everyone, including your competition.

Do you need a professional team to handle your office calls or other tasks? TAB Answer Network remains your partner in keeping the business operational amidst the pandemic. Please feel free to contact us at (800) 880-4324 for questions or inquiries.

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