Your turnover doesn’t matter because if you don’t have profit or cash, it could well spell the end for the business you’ve spent so long building up. Not controlling business costs can place a huge strain on your cash flow and obliterate your profit, so it’s vital that you get a handle on what you are spending and where.
We are small business owners and as most of us do when we are starting out, we minimised our costs to ensure we were as profitable as possible. But over time you have so many other things to focus on, your costs can take on a life of their own and you may not notice that they are spiralling out of control. However you’ll be pleased to know that getting a grip on your costs can be done relatively quickly and easily.
You need to assess your outgoings and be sure to include everything, from your major things such as rent and utilities, down to the smallest subscriptions. It’s amazing when you list everything out, just seeing what all your costs are. Things you no longer use but are still paying for, unnecessary journeys to clients or deliveries, high utility costs, the list can be quite illuminating.
To start controlling business costs again, look at renegotiating with suppliers, cancel those long forgotten about subscriptions, look at new ways of working. Below are our three top tips to save you money.
Employing staff is expensive, even more expensive is when you are trying to do everything yourself. Look at outsourcing functions within your business. That way, you don’t need to provide equipment, office space, training, sick pay or holiday pay, the company you outsource to takes care of everything. You simply pay for the service you use at a fraction of the cost of employing someone yourself and you get highly trained, competent people working for you.
Another high cost is the office where rent and utility bills can be quite substantial. Consider working from home. Collaboration with your team, and customers, can be done using technology such as instant messaging, online video meetings, emails and phone. And if the need arises for occasional office space, there are lots of companies offering meeting rooms or even virtual offices so you have a postal address for your business, rather than using your home. You may find our blog 5 Must Have Tools To Run Your Business Remotely useful.
THE RIGHT PERSON FOR THE JOB
It’s important to get your bookkeeping right and avoid the problems that occur when you don’t. Use a good bookkeeper is worth their weight in gold, as they ensure everything is done correctly and quickly. You may think that it’s money you don’t need to spend as you can take care of things yourself, or a family member can put on your sales and purchases but not using a bookkeeper can prove a huge mistake. If you think it’s costly to use a professional, just see how much it costs you when you don’t!
As well as controlling business costs, improving your cash flow is vital. Take a look at our blog post 7 Tips To Get Paid Faster And Improve Cash Flow for further help.
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