Life was anything but normal in 2020, with the effects of the COVID-19 pandemic reaching into nearly every facet of our daily routines — from how we work and educate our children to how we shop and socialize. Given the scope and scale of the resulting changes, many businesses have permanently closed or are hanging by a thread.
“Businesses are finding themselves in extraordinary circumstances,” says Tom Van Hemelryck, Idaho Regional President at WaFd Bank. “For some, cash is tight due to business limitations, while others have actually seen their savings increase.” For Van Hemelryck, one thing that hasn’t changed is the importance of making smart decisions to stretch every available dollar. While a return to normalcy will take time, it at least appears to be in sight.
According to Van Hemelryck, there are several tried-and-true tactics businesses can lean on to effectively manage their money, but all require discipline and commitment. Below are five tips to help give your business the best chance at remaining financially successful during the pandemic and beyond.
- Build a Budget
“If you look at every successful company, almost none of them have gotten there by just winging it financially,” says Van Hemelryck. “You need to set up a budget at the beginning of each year, outlining the various expenses that will need to be covered, as well as how much you’re expecting to bring in.” He recommends listing out monthly expenses, both fixed and variable. “You don’t need to necessarily adhere strictly to the budget, as unexpected circumstances happen, but being able to plan accordingly and have a strategy will be necessary to navigate and thrive in 2021.”“Developing a budget is a critical step, but it’s only the first step,” stresses Van Hemelryck. “Reassess your budget on a regular basis. The more you plan ahead, the less likely it is that you’ll be in trouble when you’re faced with an unexpected surprise.”
- Evaluate Your Spending
Many businesses needed to make cutbacks in 2020 to stay afloat, and as the uncertainty continues you should take a close look at your 2021 expenses and examine where you can make smart cuts. This could ultimately save you more money than you expect. Van Hemelryck suggests reviewing your 2020 expenses line by line to make disciplined decisions. Perhaps digitizing your business can help reduce paper use and deliver added benefits you may not have considered — like saving money on stamps if you’re used to mailing in your bills. Every penny counts!Van Hemelryck also suggests reviewing the fees and expenses associated with your bank credit card and checking account, as you may be paying for services you could be getting at no or little cost. “At WaFd Bank, we offer an array of business checking accounts. From Simple Business Checking, to Stellar Business Interest Checking, to Business Analyzed Checking,” said Van Hemelryck. “All these options are designed to help you manage your business more easily and can be tailored to your needs.”
- Be Ready to Adapt to Anything
The world learned a lot of tough lessons in 2020, but perhaps the biggest is that change is inevitable. “Your business’s adaptability is crucial to its survival,” says Van Hemelryck. “Whether it’s in your service or product delivery, marketing, or engaging with your customers, you have to be ready to change quickly and attack the new reality with enthusiasm.” In other words, always have a Plan B and a Plan C. Be flexible and be willing to shift plans quickly if needed. The future may feel uncertain, but what is absolute should be your ability to adapt.
- Embrace Technology
We all became a little more familiar with Zoom, online shopping and food-delivery apps in 2020. Many companies that embraced technology boomed during the pandemic when people stayed home and opted to shop online for everything from daily necessities to holiday gifts. One company that was hugely successful last year was e-commerce marketplace Etsy, which was among the best-performing stocks in the S&P 500.“Being able to provide your customers with flexibility in how they access your products or services is going to be key moving forward,” stresses Van Hemelryck. “Our society has been shifting toward more online services over the last decade, and the pandemic has greatly accelerated that process.”
- Save for Emergencies
As the pandemic has demonstrated, it’s always good to be prepared for the unexpected. “The best thing you can do is to have at least six months’ worth of expenses in an emergency fund for a comfortable financial cushion,” Van Hemelryck explains. “That said, if you don’t have that amount tucked away, be patient and start with what you can.”Even for those with little room in the budget, making a habit of setting aside emergency cash is critical. “The easiest way is to make it automatic,” says Van Hemelryck. “WaFd Bank sets up automatic transfers, allowing customers to move a set amount from a primary account to a dedicated savings account on a regular basis.” Depositing windfalls — such as tax refunds, bonuses or commissions — is another great way to boost savings.
“At WaFd Bank, we’re helping our customers navigate through these challenging times and providing advice on getting their finances in order – even when the world seems out of order,” says Van Hemelryck. “Taking control of your finances can help provide a sense of security and give you the confidence to feel ready for whatever life throws at you.”
Stop by to see why WaFd Bank was awarded Best Big Bank in Idaho by Newsweek. Let us earn your business.
Member FDIC, Equal Housing Lender. All loans subject to credit approval.
Tom Van Hemelryck is a banking industry veteran and has been in this business for more than 30 years. As Idaho regional president, Van Hemelryck oversees WaFd Bank’s commercial and retail banking at 24 locations throughout Idaho. WaFd Bank is the second largest national bank headquartered in the Pacific Northwest, with over 2,000 employees and 234 branches across eight western states.