In times of health crises, there is a fine balancing act between protecting the people and protecting the economy. The coronavirus has turned the world upside down, and turning it the right way back again is a timeous, finicky process.
While the times we face at present are inarguably unprecedented, there are lessons we can borrow from previous pandemics and economic recessions to ensure that the impact from the virus is limited as much as possible.
Follow these strategies and practices to control your cash flow in the face of the crisis:
Cut Non-Essential Costs
Carefully consider how you can make your payments as lean as possible. Reduce the outflows from your business, and cut any variable costs you might have. Freeze hiring processes, luxury spending, and non-essential payments. While it might sound simple in theory, it takes calculated thought regarding what is crucial and what is a nice-to-have.
Think Beyond the Immediate Pressure
The full impact of the global pandemic is unknown. Not only has the South African economy been affected in the last week, but the world’s financial system is facing a troubling situation too.
This will undoubtedly result in long-term corrective measures, which means it’s important to consider long-term victories above short-term wins. When making decisions, think of the implications they will have on your finances in the long run. Consider that the methods you use to save now can be implemented in the future.
Break Out of the Four-Wall Mentality
Think beyond the four walls of your office space and, where possible, offer your staff the option of remote work moving forward. This pandemic has shown that working away from the office is possible. It’s also undeniably better for the budgets of businesses (and the sustainability of the Earth). Cut massive overhead costs and break the traditional office thinking.
Prolong Your Payables Where Possible
Wherever it is an option, try to defer or delay payments. Do this with due consideration, ensuring that it does not damage any supplier or client relationships that you might need to rely on in the long term. Open up honest, straightforward conversations with your clients, and see whether it is an option to ask for payment extensions and rent reductions.
Make Your Money Work for You Passively
Now more than ever, investing is an important part of staying afloat in the long term. Ensure you are set up to sustain your savings and consider viable and healthy investment options. Sign up to a Financial Analysis for Investment Digital Programme and learn the fundamentals of valuation and investment analysis. The more your money grows passively today, the better your future finances will be.