For small business owners, these past few months have been nothing short of a torturous limbo. For a couple of weeks in the summer, it looked like things were on the mend. Now, with the Delta variant (among countless equally concerning others), the COVID situation is starting to look concerning once more. How can small business owners protect themselves and prepare for the unexpected (ex. stricter government mandates, general public fear, another surge in infections, etc)? The best way to prevent being caught off-guard is to prepare for all possible outcomes — in a way that doesn’t dramatically disrupt how your business currently runs. Here are three ways to protect your small business from the effects of another possible COVID surge.
1. Cut Costs Where You Can
- Figure out where you can cut your expenses. This goes beyond cutting costs in the traditional sense (like providing less of a product or service, cutting paychecks for your employees or yourself, or subletting unneeded space). It also includes rethinking your methods of payment collection, which are not all built for the same purposes. For example, Venmo used to be a cost-effective way for small businesses to collect payment, but since its new policy updates, it’s become an expensive way to complete transactions. (Here are some other reasons to avoid Venmo.) Is your payment collection system costing you more money than it should? Try looking for less expensive alternatives. Zelle, for example, doesn’t charge any fees for bank-to-bank transfers. Finli doesn’t either.
- Digitize as much as you can. If you can keep track of your customers’ information, send out invoices, and collect payments digitally (all of which can be done through Finli), please do. If you currently have someone managing all of that administrative work, digitizing can save you the cost of a whole employee, and you can re-allocate those costs into retraining your (or hiring a new) employee for a role that directly increases your small business’s profits. Digitizing cuts the cost of labor and human mistakes and allows you to use your resources more efficiently. Take advantage of the technology that is available to you!
2. Add in a Robust and Steady Stream of Income
- A foolproof way to increase your safety net is to add in a stream of income. One way to do this in a way that is relatively safe from the effects of a COVID surge and is relatively inexpensive is to offer your services online. If you teach yoga or karate or crafts, try doing live streams of your classes! That way, people who want to attend live have the option to, and people who would rather take the virtual class can. And in case in-person classes are not an option anymore, you’ll still retain the income from your virtual classes.
- Sell complementary products. Find the time to record a ten-session at-home dog training package if you run a dog training academy and sell it on your website. Sell branded merchandise if you run an art studio. The list goes on! Selling something that isn’t directly tied to your time is a good way to boost your income without too much continuous effort.
- Another way to guarantee a steady stream of income is to set your customers up on a subscription payment model. This way, you’ll spend less time and money chasing down payments and figuring out who’s paid and who hasn’t. Subscriptions also guarantee that you’ll know exactly when to expect your money, which is super important when it comes to creating a budget and making sure that all your bills and employees are paid on time. Here are some other reasons to consider incorporating subscription payments.
3. Save more aggressively.
- The point of the first two methods is to create a larger financial cushion for you and your business. If it is financially feasible for you, set as much of that aside as possible. The usual rule of thumb is to have at least six months’ worth of operation and living expenses set aside, and it might be prudent to save even more than that, given the circumstances.
- Increasing prices will give you more financial leeway as well. Try these tips to increase your prices without upsetting your customers.
It’s a scary time for small business owners everywhere, but the good news is that, this time around, you have the opportunity and time to create a safety net for your business. If part of building that safety net and protecting your small business includes automating your payment process, digitizing your invoice sending and collection, or keeping your customers’ information and payment history all in one place, read about how Finli can help or schedule a demo today!