Every successful business owner has learned that NOT having a laser focus on their top and bottom line can make or break a business. Today, as we navigate through a very uncertain and disruptive COVID environment, business owners may need to shift their focus from the P&L to the balance sheet to ensure economic survival.
In a COVID or post-COVID environment, conserving cash is the key to survival. Business owners must focus on how to keep their business operational while lowering their break-even as quickly as possible to minimize any net operating loss. The mission may seem overwhelming, but a comprehensive approach can produce dramatic results. Both fixed and variable costs need to be addressed as well as all cash outflows, but you will achieve immediate results by first focusing on variable expenses. Starting with all non-essential or discretionary expenses such as travel, entertainment, hiring, raises, over-time, etc. Review vacation and time-off policies, offer voluntary layoffs or reduced working hours, take a fresh look at exactly what work needs to be completed and how best to distribute that work to your current staff.