Businesses were caught flat-footed when the pandemic started over a year ago. Many of these businesses were forced to close due to the lack of revenue. Others were lucky enough to go online and connect with their market through their websites and online stores. Now, with more than 300 million vaccine doses administered, the end of the pandemic may already be within sight.
At this point, businesses may already be planning to expand once everything goes back to normal. But before working on these plans, they have to check their finances and see if they have enough funds for these plans. Here are the things these businesses should do to allow them to implement their expansion plans.
Review Business Finances
The first thing these businesses should do is to take a step backward and look at their finances. The pandemic affected many businesses across the country, and they had to dig deep into their savings to allow them to weather the storm. While many businesses closed, others remained open, as they focused on online sales since their customers were there.
The businesses that opened continued to generate sales, but they also had to rely on part of their savings to continue their operations. So, they may still have a long way to go before they can expand once the pandemic is over.
If these businesses own some type of real estate, they can use them to generate savings from tax payments. This means that these businesses should consider hiring cost segregation advisors to see if they can use their real estate holdings to reduce taxes and maximize savings. Businesses can find additional funds using this financial process so they can obtain additional funds that they can use for expansion purposes.
Remove Unnecessary Expenses
Businesses can also start reviewing their expenses and remove anything unnecessary. They can focus on acquiring assets that can help them grow and expand once the pandemic ends. The business can remove expenses for out-of-office meetings and pay off credit cards on time to avoid paying for interest.
Businesses can also hire freelancers for part-time positions. Freelancers are cheaper to hire than getting full-time staff who may also expect additional benefits that freelancers do not expect.
Additionally, these businesses can also go electronic and reduce paperwork. Aside from reducing expenses on office supplies, these businesses can also do their part for the environment. They can lower their energy expenses when they do not use a printer for hard copies of documents that they can send electronically.
If the business asked its employees to work from home, they can also do away with the extra office space so they can reduce their rental expense. They can even extend the work-from-home arrangements indefinitely, which translates to more savings for the business.
Have Emergency Funds for One Year
The pandemic upended businesses across the country. It forced many businesses to dip into their savings so they will continue operating. Some businesses were able to recover after a few months of having no revenues. But others were unable to recover after they used up all their emergency funds.
In the past, setting up an emergency fund that lasts for three to six months was the norm. But after the pandemic, the six-month fund has become the minimum, and a one-year source of funds is advisable. This is quite practical since many businesses only started to recover after one year into the pandemic.
At this point, a good portion of the population was already vaccinated, which has allowed many businesses to reopen and restart their operations. So, businesses should gradually build up their emergency funds to prepare for a crisis similar to the current pandemic in the future.
Focus on Saving Goals
If the business aims to build up its emergency funds, it should focus on saving goals. This means it should make these goals specific and attainable. These businesses can have a short-term goal and a long-term goal that allow them to have something to aim for.
When they have a figure to their savings goal, it gives these companies something to aim for. Short-term and long-term goals are important for the financial check-up of the business. The short-term goal should be to build up savings that these businesses can use to cover any expenses they will have while they are still trying to generate sales.
After they build up their emergency savings, they can focus on the long-term goal of having funds that they can use for their expansion plans. At this point, the savings they can generate should be more than enough to cover any expenses they incur during expansion.
At this point, businesses should check their finances so they can start planning their expansion once the pandemic ends.