If you own or operate a business, it is safe to say you have a lot on your plate. The past while has been marked by rising inflation, with demand starting to slip in some sectors. And now there’s a potential banking crisis in the US and Europe to keep a watchful eye on.
For many companies, there’s a more homegrown challenge: the December 31 deadline to repay COVID-19 related loans under the Canadian Emergency Business Account (CEBA) before these funds start accruing interest (with full balances due at the end of 2025). The 2023 deadline is still nine months off, sure. But in business, nine months can pass in the blink of an eye.
All of this could have you concerned about your business’s short-term cash needs. With that in mind, here are five simple strategies to increase your revenue and keep your costs in check, with some as simple as making a change in your perspective.
1) Unleash your building’s income potential, especially kitchens
With the Greater Vancouver Area’s vacancy rate for industrial space at an incredibly low 0.2%, according to research firm Colliers, plenty of businesses are hunting for more room. That puts you in a very good position if you have space you’re not using.
“Don’t be afraid to think outside the box here,” says Anna Plut, one of the business advisors at BlueShore Financial. “Everything from extra parking spots to that seemingly useless bit of asphalt or lawn behind your building could have value to a potential renter.”
Another often-overlooked spot? Your kitchen. If you’re not using it at certain times of the day (or after-hours), consider making it available as a “ghost kitchen”. You may have heard of this phenomenon, which took off during the pandemic. With in-person dining literally off the table, some restaurants rented outside kitchens to make items for delivery.
Even now, demand for ghost kitchens is soaring. Research firm HTF Market Intelligence, for example, forecast a compound annualized growth rate of 21.45% for ghost kitchen–driven businesses across the globe from 2023 to 2028. Because these services are delivery-based – through apps like DoorDash or SkipTheDishes – you don’t need a prime location. Before pursuing this further, though, you will need to ensure your kitchen has a health operating permit, issued by your local health authority.
2) Apply for these grants and lower-interest loans
BC is blessed with organizations that offer grants and loans to businesses. For example, WeBC offers loans of up to $150,000 to female-owned businesses in the province for things like equipment and operating capital.
If you’re launching a business, you may be able to qualify for a loan from Futurpreneur, which has partnered with the Business Development Bank of Canada (BDC) to provide loans of up to $60,000 at rates Futurpreneur says are lower than those offered by most banks. Finally, if you’re spending a lot of time managing your operations yourself, consider upgrading your tech to take the load off. For help, consider BDC’s Canada Digital Adoption Program (CDAP), under which you could get up to $15,000 in grants to put together a plan, then a zero-interest loan of up to $100,000 to implement it.
Your BlueShore Financial business advisor has full details on these programs and many more. To find ones that may suit for your business, get in touch today.
3) Bundle everything – from your products to your finances
If your products or services can be bundled together in a lower-cost overall package, now is the time to do it, particularly with inflation and rising rates pinching consumers’ – and businesses’ – budgets. You’ll also save on marketing and handling costs.
“Better still,” Plut adds, “look for ways to bundle your products with those of other companies – this way you can split the costs for things like marketing and shipping, cutting expenses even more.”
Second, you can “bundle” payments to vendors and employees by first switching away from cheques (if you haven’t already) to electronic payments. You can save yourself more time (and money) by grouping them together and doing them all at once – say every two weeks. The same goes for bank deposits, moving from daily to weekly, say (though you’ll want to make sure you keep enough money in the account to cover your bills and have adequate security on-site).
4) Consider a change in your business hours
Many businesses take a “set-it-and-forget-it” approach to opening hours, but this can be a mistake. Labour is most companies’ biggest operating cost, so it pays to make the most of it.
This is why tracking customer traffic is a must. Are there long spaces of time at the beginning or end of the day that are typically quiet, for example? Study how much revenue comes in during those times, versus the cost of being open. If those costs are higher than your sales, consider shorter hours.
One underappreciated benefit is that this could result in more customers coming at busier times – and a busy business tends to feed on itself, attracting more people keen to see what the fuss is about. But as Anna Plut points out, there is one caveat: when considering store hours, try to keep them as consistent as you can across the week, so you don’t confuse or accidentally turn away customers.
5) View employee benefits as savings in disguise
Because labour is the biggest line item in most businesses’ budgets, it can be tempting to cut employee benefits and other perks when times are tight.
But it’s best to be cautious here, as this can result in costly turnover. And “costly” may be an understatement: according to a 2022 survey by The Harris Poll, companies were spending an average of $41,000 a year dealing with turnover, including training and lost productivity. Some respondents even spent $100,000+ annually.
Worse, you may wait a long time to replace a lost employee, with Canada’s unemployment rate at 5% in February, just above the record low of 4.9% in June and July 2022. BC’s February rate was only a bit higher than the national rate, at 5.1%.
The good news is that you may not need to spend heavily on benefits: a recent study showed that while job seekers emphasized health, dental and vision insurance the most when searching for employment, this wasn’t the end of the story.
The second-, third- and fourth-ranked considerations were more flexible hours, more vacation time and work-from home options – all things that don’t have to break the bank for your business.
Let your BlueShore Business Advisor help you navigate today’s challenging economy
A BlueShore business advisor can give you more information on these and many more solutions for cutting costs, boosting sales and navigating today’s fast-changing economy. Contact us to make an appointment today.
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