It is very easy, to become so busy, that you accept your business is the way it is and don't work to make any changes. One review that every business should be doing at least once a year, ideally more often, is a full review of all costs, if you don't you could be spending money needlessly.
Costs have a direct correlation to your profit - so it really is important to reduce them where you can. This is separate from 'spending to accumulate'.
It's important to have financial information that is as up to date as possible, weekly bookkeeping is great. It means you can access really relevant and up to date information, that can help with decision making.
A good starting point is to look at your profit and loss, does it categorise your spending? You may see subscription costs that you no longer need/use but are still paying for. Or there may be better ones that give you more for your money.
Use KPI's, you may be surprised that a product doesn't actually make as much money as you thought or a department is more expensive to run, but makes less money then another. The use of this information means you can tweak the way things are run, the way you spend your money, to maximise profitability and efficiency.
Do you use a cleaning firm or rubbish collection? Even in rural places across Cornwall a quick internet search will let you see the choice of companies available.
Put a bid out to tender, you may find that as soon as companies know there is competition they are more flexible with their pricing - after all it is up to you who you sign for. If you pay your bills on time you may be more valuable a customer to them then you think.
Do you buy your regular supplies through the same companies? It is worth looking around and seeing what other companies offer. Lots of companies give discounts to new customers and it's the old loyal ones that get overlooked. Spend some time investigating different stationery suppliers, water dispenser suppliers even tea and coffee. It's surprising how much these items costs and how much could be saved by shopping around.
Are you paying too much for your IT support, legal and other professional fees? Could you save money by employing staff to do the same job? Do other firms offer more? It's not always best to go with cheapest, but rather the best service.
Don't be worried about asking for a discount, the worst they can do is say no. You may be surprised and get a few freebies thrown in such as reams of paper.
Keep your business and personal transactions completely separate. Mixing the two will make it more difficult to see the real picture.
Check out deals on bank accounts, if you are a sole trader you don't need a business bank account and this in turn can save a monthly fee. If you do have a business bank account don't accept that you have the best deal. Shop around and see what's out there. Lots of banks offer free banking for the first year, take advantage of this.
If you struggle to make sense of the financial side of the business or simply don't have time why not look at outsourcing? Tidal Bookkeeping Cornwall offers support to businesses in the Cornwall area. From bookkeeping once a week to once a month we can help sort your business finances and provide you with key information to help with your annual review of costs.
Interested? Please use our contact page here or call on 07928 676307.
The information featured in this article is for guidance only, no liability is accepted for the opinions it contains.