When the Covid-19 pandemic struck, one measure that governments across the world took was to place their country into lockdown, temporarily closing many businesses, while many others were forced to invest in change to remain in operation.
The financial impact of these closures has been huge, with some sectors suffering more than others. Alongside these large losses, there are many other costs that may not seem obvious, but that can eat into profits and endanger businesses as the pandemic continues.
The rise of working from home
Allowing part or all of a workforce to work from home has allowed many businesses to continue to operate throughout lockdowns. For many businesses, it has even saved money with lower costs associated with maintaining a premises. However, lack of people in physical workplaces has had a negative impact on the shops, cafes and restaurants in business areas and along commuter routes, as many of their clientele are no longer passing by. It cannot be denied that for many working from home is more convenient and avoids expensive commutes, so it is possible that this is one change that is here to stay, continuing to impact the businesses that depended on them.
Operating a business at least partly online results in a reduction in cash transactions. Even in-store, more customers are preferring to pay by card in order to reduce the risk of spreading Covid via the physical contact required when handing over cash. Many businesses are also encouraging card payments to help protect their employees. However, this means that card machine charges have soared, resulting in less profit per transaction.
Increasing online retail has meant that businesses have needed to factor in delivery costs. A sector particularly hit by this is the takeaway sector. Before Covid, a large amount of the takeaway business was likely to be generated by people coming to their premises, but now it is more likely to be from deliveries, often requiring the business to use one of the major delivery services. While it is possible to pass delivery costs on to the customer, this increases the cost to customers, making it likely that they will reduce the number of takeaways they order.
The pandemic is not yet over and people remain afraid of catching Covid. Social distancing might mean you have to reduce the number of customers visiting a premises at any one time, while some customers may choose to stay away unless visiting is essential.
Businesses may also lose revenue due to staff absences if they fear that they may have Covid. Worry of the virus spreading can make the rest of the workforce less productive. Happily, there is a solution to this. Providing a rapid Covid-19 test for all your employees, such as those sold by Matrix Diagnostics can quickly alert you to any cases. While purchasing packs of these tests is another cost to factor in, by quickly identifying cases, you are less likely to experience a large outbreak that necessitates the closure of your premises.
With it remaining unclear how long the pandemic will last, both the obvious and hidden costs are likely to continue to pose a challenge to businesses for some time to come.