Smart Ways to Save and Make Money Amid Challenging Times
Grow Your Business, Not Your Inbox
One thing is for certain for business owners: The COVID-19 health crisis and subsequent social distancing efforts have caused cash-flow disruptions so severe that owners in virtually every industry have struggled just to survive. Even as economies begin to re-open, when exactly things will return to “business as usual” remains unclear.
What is clear is that entrepreneurs have to think differently about the ways in which their business saves and generates money over the coming weeks, if not longer. That was the subject of discussion during a recent webinar, Managing Cash Flow During Times of Uncertainty. Hosted by VIP Entrepreneur contributor, attorney, CPA and bestselling author Mark Kohler, the webinar featured insights and strategies from Michael Botti, Senior Director of Product Marketing at Pitney Bowes, and Cassandra Gordon, Director of Financial Solutions at Pitney Bowes.
From programs and solutions to secure capital and improve cash flow to ways to protect and manage your finances, here are some of the strategies they shared that you can start implementing within your own business right away.
Generate cash as quickly as possible.
This sounds like it goes without saying and is even easier said than done. But what’s being suggested here is that business owners think creatively to uncover different revenue streams, fast.
For example, a business that typically flips houses might temporarily stop purchasing properties to instead generate revenue by renovating people’s homes. An art supply business that had to shut its doors could start selling and shipping DIY art supply kits. A software development firm that was working on a major development project put that intensive plan on hold to offer consulting services in the short term to start generating money right away.
It’s important to “find adjacent opportunities to generate cash from their primary revenue streams,” Botti said during the webinar. “There’s no need to reinvent your business. Look for opportunities to leverage your expertise and core business competencies to find ways to generate revenues from other channels.”
Build a financial reserve.
How is a business that’s barely surviving supposed to build financial reserves? Kohler said it’s absolutely doable when you consider options you might not have thought of before.
One option is to sell stuff, he said. “If you have equipment laying around your business site that you really don’t need, why hold onto it? Sell it now … and put that money in the bank.”
If your business received an Economic Injury Disaster Loan (EIDL) emergency advance from the Small Business Administration or funds from the Paycheck Protection Program (PPP) via the CARES Act, Kohler recommended using that money wisely. “This is a financial resource to fall back on” when usual revenues aren’t coming in, he said.
For the PPP funds, Kohler suggested working closely with a tax advisor to make sure your business follows the guidelines closely every week over the full eight weeks to make sure every dollar spent is forgiven.
Save money by revisiting variable costs.
Don’t reduce costs indiscriminately for the sake of saving money in the short term, Botti said. Some of the areas you cut could hurt your business in the weeks and months ahead.
Shipping is a prime example of a cost to re-evaluate and find ways to save money. An easy way to do that, he said, is with a shipping resource like SendPro Online from Pitney Bowes. People who ship using SendPro Online can save as much as 9 percent on first-class mail and up to 40 percent on priority mail, Botti said.
You also get a 10-lb scale to weigh packages and a cost comparison tool to make sure you’re choosing the carrier with the best price for each shipment. “Inaccurate weights on packages add up to wasted money on postage,” he said.
Re-evaluate existing or open new lines of credit.
Because of social distancing, business have doubled down on or finally become involved in selling and shipping products online. That means many entrepreneurs are learning the process—and the costs—of shipping on-the-fly.
Gordon suggested that these business owners consider looking into non-traditional lines of credit. For example, Pitney Bowes offers a line of credit for operations including shipping and postage. Pitney Bowes walks business owners through the application, assessment, and underwriting processes. Using those funds to cover expenses related to shipping will help owners save their cash for important expenses such as payroll, insurance, and rent, among others, she said.
Additionally, Gordon pointed out that Pitney Bowes offers help refinancing recently purchased business equipment. While past expenses like these might have made sense at the time, no one expected a global pandemic and financial fallout. “This is the time to think out of the box and think strategically on where there are sources of cash” for now and in the future, Gordon said.