All businesses experience periods when it is a struggle. During this period when the Covid-19 pandemic is causing wide-spread and long-term problems and challenges for most companies, the need to cut costs is greater than ever. For some the need to reduce expenses will be over the short- or medium-term. However, other businesses may be required to make long-term or even permanent changes.

While this is a scary and stressful time for many, the good news is there may be several savings you can make fairly easily. For example, obtaining comparative insurance quotes – including for important public liability cover – will help you select both the cover you really need and save on insurance costs.

But what do you need to consider so you make appropriate changes that will save you money and help preserve your business?

TIMELINE: How soon do changes need to be made?

Not only do we need to make smart decisions about where and how we can make changes, we also need to be aware of the timeframe involved.

The first question you need to answer is, “How long have I got to make changes?” Do you have a financial cushion that can carry your business by covering costs in the face of reduced income? If so, how long will it last? A careful, realistic examination of your bank balance and financial situation against your expenses will allow you to answer this.

Secondly, think about any funds that are due to come in such as outstanding payments or refunds. If you are, how much of a difference will they make to the timeframe you have?

DURATION: How long will changes need to be in force?

This decision relates to the need for either temporary savings or reductions or long-term, even permanent, cuts in spending. Essentially what you need to decide is:

  • Do I need to get my business through a short period where cashflow is problematic?A company that is healthy but is experiencing delays with receiving income and therefore has liquidity problems may only need a temporary, short-term reduction in costs until things even out again.
  • Has my business been experiencing difficulties often or much of the time?This may be due to having high overheads and running costs that make building a cash buffer hard or impossible. In this situation you need to introduce long-term, permanent changes to reduce costs.

The fact that business in every industry and sector are encountering greater difficulties and uncertainty than usual due to the pandemic may also change your situation and thinking in terms of duration.

EXPENSE AUDIT: Which are essential and what are nice-to-haves?

Take the time to examine every aspect of what you do and how you do it. Then draw up a list of all the items and services that your business must have to function. Do not confuse things that make life easier or more pleasant with essential. The test is to ask, “If I no longer had ______, what would happen?”

Potentially anything that is not on the essentials list can be cut, suspended, reduced or replaced with a less costly or free alternative.

REDUCTION TIPS: Regular operating costs

Although one-off expenses can make a big hole in a bank balance, it is the regular, ongoing monthly and annual costs that can take an ultimately heavier toll. While it may not be possible to reduce all essential expenses, there are areas you can examine.

  • Rent / mortgage: This area does not offer a quick fix as it takes time to set things up. You might consider sharing business premises, and mortgage costs, with another enterprise. Alternatively, moving to smaller offices with lower rental could be an option.
  • Insurance: Review both the types of cover you have and how much you are paying. Do you require all the cover you currently have? Could you pay less for comparable cover from another insurer? Visit a site such as BizCover to compare policies and get quotes.
  • Internet: Here again it can help to shop around. Could you get the same quality and speed of service from another provider? Even if you cannot find a cheaper option it can pay off to contact your provider about different schemes or a reduction.
  • Phones: Do you have a landline and mobile phone(s)? Do your staff also have company phones? The first question is whether you need all of them. In addition, are your phones on monthly contract or pay-as-you-go? If you have a contract, is a less expensive option available from your provider?
  • Utilities: There may be savings to be made if you move to a different provider of utilities. It is worth spending time comparing rates and shopping around.
  • Heating and cooling: Money can be saved by not having heating or cooling systems running when they are not needed either because the weather is mild or when the premises are empty. Alternatively, it might be possible to adjust thermostats to more economical levels.
  • Bank accounts: Investigate whether moving your business account to another bank or a different type of account might save fees.
  • Subscriptions: If you subscribe for publications, services, or software ask yourself if you need to have them. If a subscription is unnecessary, cancel it. It can be renewed when times are better. In addition, there are free software options that are free and might work as well as the ones you currently pay for.
  • Travel: Can travel distances and frequency be reduced? This has been enforced for many with lockdowns and restricted movement. However, if travel can be introduced long-term, it could introduce significant savings.
  • Memberships: Professional memberships are a useful networking and business tool, but they can be pricey. Investigate the possibility of suspending your membership and saving the associated fees.
  • Retirement provisions: With some funds and schemes it is possible to reduce contributions. However, any changes should only be made after getting professional advice as it can adversely affect you down the line.

REDUCTION TIPS: Irregular or one-off costs

Irregular costs are easier to forget and can escalate to a surprising degree. During tough times they need to be monitored and controlled.

  • Equipment: If possible, replacing equipment can be delayed in favour of repairing, refurbishing, or upgrading items.
  • Advertising: examine your marketing strategies, techniques, and channels to see if any savings are possible without making marketing less effective.
  • Product range: Could you reduce the range of products that you offer customers? If you could, you would reduce stock and other operational costs.
  • Events: Attending or exhibiting at business events can be costly. Unless attendance is necessary, tickets or attendance can be cancelled.
  • Courses: If these can be delayed it is best to cancel or postpone them. If you have already paid for them and there will not be a refund you may as well attend.
  • Food and refreshments: Extending hospitality to customers does not have to involve an expensive business lunch or dinner. Equally, staff do not need a broad range of refreshments or expensive brands.
  • Office supplies: Keep a tighter control on stationery, printing and mail items all of which cost and are an almost invisible expense.
  • Marketing and branded items: Staff uniforms and corporate gifts can be put on hold till things ease.
  • Stock: If stock is moving, see if you can negotiate more favourable production costs. If things are slow, reduce orders to reduce expenses and the need for storage.
  • Storage: Assess the size of your storage facilities. If you consolidated and rearranged stock could you manage with smaller and more affordable space?


Do not wait too long to take appropriate cost saving actions. If you delay, debts will mount, and the business’s financial foundation could be disastrously eroded.

If you are unable to do the necessary assessments of your business, or do not know where to find information, get help. Consult either a financial or business professional or contact the relevant government agencies that can advise you about assistance that may be available.