The number one focus of any for-profit SME (small to medium-sized business) owner should be to continually drive and increase your revenue and, in turn, your profit. With that said, one of the easiest ways you can increase your overall profit figures, especially during a downturn, is by taking the time to look into (and ultimately, control) your costs on a regular basis, thus reducing your overhead.
Known as performing a cost analysis on your business, this is one of the simplest ways in which to boost your profitability due to the fact that, in the majority of cases, all that’ll be required of you (or your accountant) is a quick call to a number of service providers with the intention of renegotiating your rates.
Unlike other methods of business financing; such as selling an asset or a portion of your company, when you take the time to control your costs on a regular basis you’re essentially dealing with ‘found’ money; savings that will directly impact your business’s bottom line without you having to lose something in return.
Reducing Your Business Expenses
There are most likely countless areas within your business in which you’re reasonably able to cut your weekly, monthly, or annual expenses. Though this list will vary from business to business, some of the more common ones include your:
- Business utilities, such as your electric, water, and gas bills,
- Telephone costs, both mobile and landline,
- Transportation costs, both petrol and public-transportation expenses,
- Insurance policies,
- Office stationary, including printing supplies,
- Computers and other electronic devices,
- Computer software subscription charges.
Once you’ve made your list and added up how much you’re paying for each, you’ll notice that not only is this figure much higher than you would have first assumed, in many cases you’re not even receiving a particularly good service from some of them; you’ve simply stuck with them as it’s easier than having to change providers.
Many of the costs your business is currently paying out are potentially much cheaper for new customers signing up today; and these service providers know this. When you phone them expressing your wish to renegotiate your contract (otherwise you’ll cancel your contract at the next opportunity), chances are they’ll offer you an immediate discount on the spot.
And if they don’t, follow through with your promise by finding a better deal elsewhere.
Accountants to Help You Control Costs
Renegotiating all your business’s contracts on an annual basis is recommended if you wish to ensure you’re constantly paying as little as possible towards your company’s operating costs. You never know, you may even notice that you’ve been paying for a service that expired months ago.
To speak with a professional to discuss how we can assist you to control costs and maximise profit, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.