“It is not the strongest or most intelligent who will survive but those who can best manage change.” – Charles Darwin

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

We talk a lot about how to cut the deadly wastes to save money. Over the next couple of months, we’re re-doing our “Deadly Waste” articles, only we’re taking it up a few notches in order to be your partner in adapting to this storm.

The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. We hope this helps.

Transportation costs can creep up in the shadows. We often don’t factor all of them in, and we rarely use these expenses in our negotiations even though third party transportation costs can be quite flexible. 

It’s time to zero in on all the costs we can cut back, comfortable or not. 


Your Vehicles 

Company vehicles are crucial to daily business, but it’s not business-as-usual right now. Whether you have 1 or 100 vehicles, it’s time to consider what role they’ll play in the challenging times ahead.

Your first instinct may be to sell them, and as a last resort you could. But vehicles are terrible investments and, especially in a climate like this, you won’t get much for them. You’ll also need to spend a lot more to replace them once things pick back up, and they will. Hold onto your wheels if you can.

We often forget about insurance, but it’s expensive overhead. Make a projection for how much you’ll need for your fleet and cancel insurance accordingly.

It sounds counter-intuitive, but keep investing in daily maintenance. This is not the time to have to haul company vehicles into the shop for expensive fixes. 

Also, check periodically on any vehicles you’ve pulled insurance from and parked. Run them weekly and perform general maintenance (making sure they’re on your property, of course). 

Yes, gas is cheaper. But for most businesses that cost savings will be insignificant, and typically not something we want to be reminded of.


Your Vendors

When you hurt, your vendors hurt. They will also understand that revenue and margins are not what they used to be.

Transport costs are a favourite bargaining chip. Buy more, and freight goes down. Buy more than that and it’s free. It’s time to negotiate with your vendors on this. Be respectful but also frank about your reality. Many vendors will bring those rates down.

If you’ve gotten better deals by taking larger shipments from farther away, negotiate that. Most importers have warehouses, and most warehouses are fuller than they should be because of economic pain. Do what you can to leverage our new reality.


Car Allowances 

Senior management often enjoy this as a perk, essentially being reimbursed for kilometres travelled for work. Clicks are tallied to and from businesses lunches, client visits, etc.

But lunches and client visits aren’t happening now. And those managers may be working from home. So do those allowances really make sense?  Are they, in fact, justifiable if there are negligible kilometres travelled. 

You will, of course, get push back on this. But these cuts aren’t meant to be comfortable; they’re meant to help you adapt and stay alive. 

The “adapt and survive” mantra may frame business over the next year or more in Alberta. We’re here to help you get ruthless with your waste: it’s the best way that we know to keep your lights on in times like these.