- An uneven recovery is bringing new budgeting challenges, as margins get squeezed between new ongoing operating expenses and curtailed capacity.
- Business Insider spoke with business leaders about how to trim costs and maximize revenues under these difficult circumstances.
- Here are three tips that can help business owners make the math work.
- This article is part of a series called Resources for Resilience, focused on providing tips and inspiration for small businesses who are learning how to survive and thrive in today’s economy.
On March 14, Fit Athletic Club’s five locations in San Diego were serving an average of 6,000 members per day. A day later, the business was frozen and 430 employees were on furlough to slow the spread of the coronavirus, CEO Scott Lutwak said in an interview with Business Insider. “I didn’t even know how to comprehend what had transpired 24 hours earlier,” he said.
Today, like many business owners across the country, Lutwak is trying to get his business back on its feet, facing down a re-opening process that is far longer than many expected.
Along with that uneven recovery come new budgeting challenges, as margins get squeezed between new ongoing operating expenses and curtailed capacity hampering revenues.
In addition to Lutwak’s fitness center, Business Insider spoke with a restaurateur and an office space provider to learn their best advice for making the math work.
Make safety a part of your brand to attract and retain customers
All three businesses we spoke with have made serving health-conscious customers part of their brand identity. It’s important to make a plan and clearly communicate it with customers and employees.
Jon Taffer, the host of the TV show "Bar Rescue" and founder of Taffer's Tavern franchise, trademarked a "safe dining" system that includes sanitation standards for food and equipment as well as a staffing plan, all aimed at reducing risk.
Office space provider Firmspace is also seeing a competitive edge from doubling down on its branding as a safe place to get work done. In contrast to the open floor-plan coworking arrangement, Firmspace caters to professionals who need more private, secure workspaces — an arrangement that was more compatible to social distancing.
"We were COVID-friendly before we knew what COVID was," said Charlie Tanner, the company's director of real estate and development, said.
Tanner said Firmspace's existing model and its quick action and clear messaging around safety have helped keep clients coming into their offices, even as droves of white-collar workers increasingly work from home.
Don't assume that customers will trust you to have a plan. Lean into the part of your business that is most able to continue safely and lay out exactly how you plan to do that.
Work to reduce property expenses
Rent can be one of the biggest expenses for any business, and it's difficult to find a way around that. However, these are extenuating circumstances, and some businesses are seeing success in negotiating lower or deferred rent.
Others may realize they don't need all the space they've been paying for. Tanner says that some companies are seeing considerable cost savings from downsizing their offices and closing satellite locations.
Businesses that need modifications are turning to architects and developers to include designs and technologies that improve safety and physical distancing. It may be worth your time to discuss which costs your landlord may be responsible for, and which are up to you.
Supercharge your scheduling and use that data to improve efficiency
To address the challenges of reduced density, businesses are stepping up their scheduling game. Fit Athletic Club members now sign up to work out during a certain time-slot. At Firmspace, all shared conference rooms require a reservation.
Schedules afford each business four key advantages: first, all appointments include a buffer at the end for disinfecting space and equipment; second, it simplifies contact tracing in case that's needed; third, it allows the businesses to stay within capacity limits mandated by local authorities; finally, scheduling allows you to plan ahead for your staffing, cleaning, or stocking needs.
Tanner of Firmspace said managers should really be thinking carefully about which members of their teams truly need to be in a physical space, and that flexible arrangements can help make sure you only pay for what you need.
He stresses the importance of maintaining clear lines of communication among your partners, employees, and customers — after all, without them, you don't really have a business.