[Thread] 5 ways to cut business costs during #Covid19SA
To keep your business afloat during the COVID-19 pandemic, you will need to cut costs as critically as you can.
Here are 5 ways to cut costs effectively before making staff cuts 👇
To keep your business afloat during the COVID-19 pandemic, you will need to cut costs as critically as you can.
Here are 5 ways to cut costs effectively before making staff cuts 👇
1. Remove non-essential expenses
During your financial assessment, you would have made three expense lists (Fixed, Variable, and Periodical). From these, begin to remove non-essential expenses. These can fall within any of the three categories.
During your financial assessment, you would have made three expense lists (Fixed, Variable, and Periodical). From these, begin to remove non-essential expenses. These can fall within any of the three categories.
Be very critical during this step. If it doesn’t contribute to the core of your business, remove or cancel it. For periodical expenses, you might be able to defer or reschedule services, for example, vehicle maintenance or service costs.
2. Reduce fixed expenses
Your biggest fixed expense is likely your rent. Approach your landlord for a reduction, or alternate solution.
Your biggest fixed expense is likely your rent. Approach your landlord for a reduction, or alternate solution.
You can also try to negotiate relief on your bond, and debt, by letting institutions know that COVID-19 has impacted your business and ability to make repayments.
3. Renegotiate fixed fees to a pay-per-use basis
Contact service providers and change your fixed contracts to pay-per-use contracts where possible. For example, switching from paying a monthly fee for a fixed amount of data to a pay-as-you-go option.
Contact service providers and change your fixed contracts to pay-per-use contracts where possible. For example, switching from paying a monthly fee for a fixed amount of data to a pay-as-you-go option.
4. Request payment deferrals, holidays, and extensions from suppliers
Approach your suppliers with a proposal for deferring payments. Rather than wait until you miss a payment or receive an overdue notice, approach your suppliers with a solution.
Approach your suppliers with a proposal for deferring payments. Rather than wait until you miss a payment or receive an overdue notice, approach your suppliers with a solution.
With all businesses and their supply chains affected during this time, many major suppliers will be expecting this and may be able to help you. After all, their business is reliant on partnerships with many businesses just like yours.
5. Utilise the SARS payment holidays for VAT and PAYE
Certain employers have been granted with tax relief benefits, as announced by President Cyril Ramaphosa on March 23rd.
Certain employers have been granted with tax relief benefits, as announced by President Cyril Ramaphosa on March 23rd.
Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their employees’ tax liabilities over the next four months, and a portion of their provisional corporate income tax payments, without penalties or interest over the next six months.
Follow the link to learn more and get additional resources for running your business, in our #COVID19 Small Business Guide.
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