Photo of a business owner who is managing cash flow during COVID-19.

Ideas from business owners to preserve small business cash flow

A year ago, an information technology company in Ohio wasn’t much concerned about the cost of printer ink.

Now, cutting relatively minor office supplies is just one of many ways small businesses are preserving cash flow as the economy struggles to rebound from widespread shutdowns.

Principal® recently surveyed dozens of small business clients on their tactics to reduce cash burn. We heard plenty of challenges—including an in-home care provider who spent thousands of dollars on masks alone.

Small business cash flow remains a top concern as some business owners also focus on how to spend their PPP (Paycheck Protection Program) loans to retain workers and remain in operation. Even essential businesses aren’t immune to the need for creative cash savings.

Stork H&E Turbo Blading, for example, still turns out turbine blades for the gas and steam power generation industry from its New York factory, where its employees “can’t pick up a two-ton machine and move it to be able to work from home,” says Debbie Chadwick, human resources manager.

The manufacturer with a staff of 100 implemented a hiring freeze and canceled all external training and conferences to help control its rate of cash burn.

“We believe that our clients are being conservative with their spending,” Chadwick says. “As a result, we might see fewer orders over the next few months. If a power unit hasn’t been opened for maintenance, some of our clients may opt to wait to do so until fall, and see where things stand economically then.”

The businesses we surveyed cited a variety of ideas for cash savings. We found some common themes among them. We offer them here for your use or inspiration.

Big cash-flow savings


Domestic air travel through May plunged about 90% from a year ago.1 The public health risk and high cost of business flights, plus the widespread adoption of videoconferencing, made this a prime cash-flow target. One business “eliminated all travel expense, including car allowances.”

Hiring freeze

Small business owners try to be good stewards of employees and preserve jobs where possible. The easiest move is to delay hiring to prevent a potential layoff later.


Many of the business leaders surveyed said they hadn’t yet cut salary, but some (such as a Midwestern manufacturer and a media firm on the East Coast) cut overtime hours to trim labor cost while preserving base salaries and jobs.


An engineering and data services provider intends to save cash on rent by letting its entire staff work remote for the foreseeable future. A real estate manager may downsize the office when the current lease expires. Others have simply saved on maintenance and utilities in vacant workplaces.

Overall budget cut

One manufacturer cut 10% across all departments to minimize the impact to any single arm of the business.

Medium cash-flow savings

Delayed purchases and inventory

A chemical company reduced its order of raw materials and began requiring advance approval for all purchases. One agricultural firm delayed buying new equipment.

Social Security

A lawn and landscape company delayed its employer Social Security payments under a new provision in the CARES Act.

Vendor/supplier discounts

A manufacturer renegotiated price contracts with suppliers. A testing lab stretched its accounts payable from 20 days to one month.

Loan refinancing

Rates remain low for business loans even outside the billions in new federal stimulus programs.

Customer/price negotiation

A foundry raised its prices. Another business “utilized an early payment option” with its largest customer, which “provided a large amount of cash 30 days earlier than normal.”

Small cash-flow savings

Office supplies and service

Of course, there’s printer ink. Another business bundled all its various employee videoconferencing subscriptions. Some firms can deliver more work digitally and save shipping costs. Others have saved money on cleaning because the workforce is now remote. Mobile phone plans have been cut, trash collection reduced in favor of on-site recycling, even thermostats adjusted.

Staff perks

“We’ve removed daily snacks from the breakroom—also for safety reasons,” one Midwestern manufacturer says.

Sales/client perks

“We have always allowed our salespeople flexibility on things to buy and give to customers, as well as where they stay, or how they fly,” says one manufacturer. When travel restrictions loosen, this budget will tighten.


Some small businesses have cut non-essential marketing. Even Google announced a 50% cut to its marketing budget in 2020.

Barter services

Arranging product or service swaps with nearby businesses or key industry contacts could provide a surprising source of incremental savings (but consult a tax expert to be sure you satisfy reporting requirements).

Next steps

1 Transportation Security Administration figures for daily passengers through domestic airport checkpoints in 2019 and 2020.

Stork H&E Turbo Blading is not an affiliate of any company of the Principal Financial Group®.

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