COVID-19 is a game-changer for small businesses. Because of the massive disruption to the economy, some smaller firms have closed their doors. Many are now struggling with smaller budgets and adapting to new office space guidelines. Plus, the CBO is projecting a sharp contraction in the second quarter with unemployment rates close to 14%. In short, the economic news is bleak.
But there’s a big, bright silver lining here — change drives innovation. And for business owners flexible enough to rethink their current process, there’s plenty of ways to shake things up. In fact, the next quarter is the perfect time for finding new ways to cut operating costs and survive the “Great Lockdown.” Start with these six simple ideas to save money in your small business.
1. Get Energy Efficient
Air conditioners and HVAC units are usually the biggest energy users for both domestic and commercial properties. And summer means higher electric bills, so start there. Follow basic summer cooling tips to reduce your small business’s monthly electric bill. And take the time to do some regular maintenance on your AC units. Do-it-yourself tasks like air filter changes and vent cleanings don’t require expensive HVAC repair technicians. And regular maintenance ensures your system cools the same for less.
If you have the cash to invest, consider updating old appliances (e.g., refrigerators, coffee makers) to ENERGY STAR models that use less electricity. Small businesses that invest can cut energy costs by 10% to 30%. So, start with your air conditioning system’s thermostat. Swap out your old one with a new programmable or “smart” thermostat. These high tech temp readers adjust your cooling automatically, based on your specific office’s energy needs.
2. Switch to a Virtual Office Space
Remote work is trending because it cuts costs and gives employees more flexibility. During the lockdown, you probably moved your office online out of necessity. But if it worked, keep doing it. There’s no need to pay rent or utility costs if you can hack it. And switching to a virtual office will save you tons in cooling costs, water, paper, rent, building insurance, security, and more.
Depending on your situation, you may have some upfront investment — content management software, a conference calling service, or project management apps. If this is the case, don’t invest before you look into free pricing models, trials, and discounts. Either way, any upfront costs of switching to a virtual workspace are easily offset by the savings you’ll see this summer. Plus, your employees will enjoy not making the hot commute home every evening.
3. Employ Your Kids
Put your kids to work for your small business. Trade extended privileges or higher allowances for mowing the lawn, cleaning bathrooms, or doing inventory. Enlist your grandchild into an internship to learn the ropes at work. Family work arrangements save you on staffing costs and teaches your loved ones the value of hard work and investment. Plus, if you pay reasonable wages, you can claim their wages as a business deduction.
But don’t just hire your child or grandchild on the spot. Put them through your usual hiring process. Take the opportunity to teach them how to create a resume, how to interview, and the processes of onboarding at a company. These are great skills that will benefit you both.
4. Combine Business with Pleasure
Got a summer business trip on the calendar? Then, add a few extra days for a short summer vacation. Combining business and leisure (i.e., “bleisure time”) helps save money. No need to pay for two sets of plane tickets, car rentals, and hotel rooms when you can combine them into one trip. Plus, hotels often give lower nightly business rates that you can extend for a few days of leisure time.
There are good and bad ways to combine a business trip with a vacation. While you can certainly take your family along for the ride, make sure you set boundaries for work and play time. Distractions on bleisure trips are easy and might cost you more than you save. And keep expenses separate. You’ll likely be able to deduct business expenses as long as you do more business than pleasure.
5. Start a Summer Internship
The summer break means there’s a large pool of unemployed young adults willing to trade their labor for minimum wage plus some work experience. Take advantage by starting a summer internship. Start a partnership with local universities and their business departments. They’re great feeders for enthusiastic students looking for short-term work.
But remember, don’t view interns as free labor. If you’re a for-profit business, you’ll likely need to pay at least minimum wage and overtime pay to interns. That doesn’t mean you can’t have an unpaid internship. They do exist, but they’re not the norm. To be sure, check the Fair Labor Standards Act (FLSA) guidelines to see if you’re meeting the requirements for unpaid internships.
6. Use the Sharing Economy
Uber and Airbnb are the face of the new sharing economy. But today this “what’s yours is mine” business model extends into almost every task imaginable. For small businesses, it’s a prime chance to save a buck. Summer months and sales require untold numbers of small tasks and short term commitments from staff. Instead of staffing up ahead of time, use sites like TaskRabbit or UpWork to hire for one-off tasks and freelance work.
Consider sharing a workspace with another small business to cut your rent and electricity costs in half. Find a business you actually use and barter your services for theirs. Or maybe you’ve got an extra room or two that’s sitting empty. Instead of paying to cool it, rent the space out to another business in need of storage, or a freelancer looking for a small office set up. The cooperative opportunities are endless for small business owners who know where to look.
Hilary is a freelance writer, small business owner, and travel junkie. With a background in content strategy, journalism, and business management, she loves to explore solutions for success, in all areas: health, business, parenting, life.