10 Easy Ways to Save on Business Expenses During the COVID-19 Pandemic
By: Rich Kizer & Georganne Bender
Whether you are open for business or your doors are still closed, saving money is always on your mind. We haven’t hit a new normal yet, we are still in the throes of the “now normal”, where things change daily and will for a while. Learning to pivot is critical. Here are some ideas to help keep on track, cut costs, and increase your bottom line:
1. Talk to your landlord
Until business picks up, rent will continue to be an issue. If you haven’t yet, talk with your landlord to determine if a rent reduction is possible.
Linda Flaherty, owner of two Once Upon a Time upscale children’s boutiques in Alabama, contacted both of her landlords. One waived the rent for a month, a savings of $1000. The other deferred half the rent for one month, the difference to be paid by the end of the year; it’s not perfect but it gave her some breathing room. Here’s the thing: Nothing will happen unless you ask.
2. Go the DIY route whenever possible
Before she was able to reopen her stores, Linda furloughed all employees and ran the business herself. This equaled a $4500 per week savings for six weeks.
Mike Simon owns The Little Traveler, a store within a sprawling mansion of sorts in Geneva, Illinois that takes you “around the world in 38 rooms.” The store is now closed but when it’s operational, shoppers arrive by the busload to spend the day exploring its treasures and enjoying lunch in the Atrium Café. It takes a lot of hands to run a store of this size but lately Mike has been on his own.
“I have used this time to keep our name out in front of the customer via social media and videos without paying for ads. We quickly built an online store and have had good initial results from it. With almost all of our people on furlough, I’m doing the picking, packing and shipping, so I’m learning a lot about how things like product positioning and timing of Facebook posts and email blasts influences sales. It’s fun to experiment like this but I have never worked harder in my life.”
3. Put your merchandise out there
Get product out of the stockroom and onto the sales floor – that’s cash sitting on those dusty shelves. Merchandise, unlike fine wine, does not get better over time. If it’s in season and saleable list it on your website or include it in your Facebook Live sales events. If it’s old and has lost its appeal, mark it down, and if it’s too far past its sell point donate it and take the tax write off. Think about what that old product is costing you each month. Move it out.
4. Be proactive with your orders and supplier relations
Push back ship dates wherever you can, cancel shipments for items that will be past their sell date once you reopen, and ask vendors if it’s possible to return any unsold goods. Again, be proactive – your vendors are your partners and will try to help when they can.
If you don’t already, add “Start Ship”, “Complete By”, and “Cancel If Not Shipped By” dates on every order you write. Some vendors will give you a percentage off late goods if you decide to keep them.
5. Shop your associations
Many trade associations offer special member discounts on everything from cleaning and office supplies to email marketing to gas and everything in between. Visit the “members only” section to see what you’ve been missing.
6. Lower your credit card interest
Sort through the piles of pre-approved credit card offers you receive and look for one that offers a lower interest rate than what you are currently paying. Call your current company, tell them you’ve received a lower rate offer, and ask for a rate reduction. If they are eager to keep your business, they will likely say yes. Then smile and ask them to waive the annual fee.
7. Optimize your credit card processing
Cash used to be king but during a pandemic no one wants to handle it. Now it’s all about credit cards, debit cards and contactless payment. Credit card processing fees can add up quickly so it makes sense to shop around for a processor that best fits your needs.
Instead of a myriad of confusing fees, Payment Depot charges a monthly membership fee and gives you access to direct wholesale rates for all your card transactions, putting more money in your pocket. SwipeSimple, Payment Depot’s contactless payment app allows you to accept payments on almost any iOS or Android mobile device without any physical contact. It’s perfect for keeping shoppers and employees safe.
8. Find ways to lower operating expenses
Little dollars can add up to big savings. Operational expenses add up quickly. We saved a bundle when we opted not to renew the service contracts on some of our office equipment. Linda Flaherty dropped the loyalty program she was paying $600 for monthly and found one with the same bells and whistles for just $100 per month. Stop paying for subscriptions to magazines that you never read, and memberships you renew just because they send you a bill.
9. Save on shipping
Weigh the packages that are delivered to your store, then check to see how much it would cost you to return the package to the sender. Review each invoice to ensure you were charged the correct amount.
Even little overages add up, as do the refunds you are entitled to when a package you shipped to a customer via UPS or FedEx arrives late. Check out Refund Retriever, a company that automatically detects issues with your shipments, applies for refunds, and verifies that those refunds are credited back to your account. There is no contract, all you play is a percentage of what is retrieved.
10. Reopen your store when you are ready
Once you get the all clear it’s okay to take your time. You don’t have to bring everyone back at once; start by opening fewer hours than normal. You’ll save on payroll, utilities and other operating expenses that occur when the store is open.
Shopping in-store isn’t back yet at full capacity. If you continue to run your store as you did in pre-COVID-19 days your money won’t go as far. Keep a closer eye on non-profit-producing expenditures and you will be in much better shape for the long run.
Lower your credit card processing costs with Payment Depot
There’s a reason why people call us the good guys and gals of payment processing. We bring transparency to the world of credit card processing and work with merchants in finding the best deal.
As a fellow small business, we look out for SMBs and ensure that you’re not paying more than you have to
Get in touch with Payment Depot today — and let’s talk about how you can lower your payment processing costs.