Within the first few years of opening their doors, a large percentage of businesses fail. While there are several reasons that contribute to this, failure generally has to do with cash flow problems. With this in mind, it’s important to understand the difference between essential expenses and non-essential expenses to minimise costs.
This doesn’t have to be a time-consuming process that takes a lot of thought. As a matter of fact, reducing business costs is simply about making wise decisions. Here, we discuss the practical steps that businesses can take to cut costs and keep expenses to a minimum.
Review and revise your budget
When times are tough, cutting expenses in all areas may seem like a good idea. In reality, cutting too many costs at once may negatively impact your business. Before any decisions are made, you must have a clear understanding of your present and future budget – so it pays to have your bookkeeping up to date.
It may be that you can save in some areas – perhaps by pausing a few outgoings or looking for cheaper alternatives. Once you’ve reviewed this, you should consider developing financial forecasts for both best and worst-case scenarios. It’s also important to develop a plan so that your business is ready to swing into action in the near future.
Adopt a work from home policy
Now that technology has made it easier for people to communicate and collaborate from anywhere in the world, working from home is becoming increasingly common. It’s not just an easier way of living and working though. It can save money for your business too.
For starters, working from home reduces travel expenditure as well as outgoings for office spaces, facilities and utility bills. You also don’t need to pay for cleaning services and office supplies. While these might sound like small costs, they can soon add up…
Take advantage of technology
By investing in the latest tools and technology, employers can actually save time and money in the long run. For example, if you’re able to run your business from home, consider holding virtual meetings to reduce petrol costs or, as mentioned before, the need for co-working spaces.
There’s also plenty of free online collaboration tools available, such as Google Docs and Trello. Not only will you be reducing your paper consumption but you and your colleagues can wave goodbye to the seemingly endless costs of printing. Plus, your documents will be safe in the cloud…
Speak to a professional
Another way to minimise business expenses is to speak to a professional. An accountant like Nabarro Poole can take a look at your finances, streamline your accounts and suggest ways to save. Our budgeting and forecasting service is ideal for both small and large businesses looking to cut costs and stay financially afloat.
Our team of accountants can offer you the best guidance possible, allowing you to focus on running your business knowing that your financial obligations are being taken care of. For further information on our services, don’t hesitate to contact us today!