Sponsored by
STEP 2
Minimise your business costs
Rachel Harris MBA MAAT
Director of striveX Accountants strivex.co.uk
Rachel Harris
MBA MAAT
“In the current economic climate, carefully managing spending is crucial for the survival of UK businesses of all sizes and types. Controlling expenses enables businesses – especially micro firms – to navigate uncertain times and maintain financial stability. “It's fair to say that many businesses, to varying degrees, overspend in certain areas. When owners are busy managing their businesses, closely monitoring all costs becomes challenging, which can mean they fail to recognise where they’re overspending and by how much. “Cost savings can often be made in most areas. No expense should be off limits when exploring ways to cut costs in your small business, because even small savings here and there can add up to significant savings over time. “The cost-cutting process starts with a thorough assessment of your current spending in all areas. Identifying where savings can be made is crucial, whether it's by renegotiating contracts, streamlining operations or eliminating waste or unnecessary spending.
“Cutting costs isn't solely about finding cheaper suppliers, it’s about getting superior value for money. As a business owner, don’t focus solely on price, you need to consider other important things, such as quality, the reliability of your suppliers and long-term benefits when you’re making buying decisions.
“Business owners must be mindful of the potential effects of cutting costs. While it can positively impact your cash flow, excessive cuts or cost-cutting in the wrong places can negatively affect your sales and profitability. Striking the right balance is essential and you should never rush cost-cutting decisions without first realising the likely impact.
“Cost-cutting often involves having to make very difficult decisions. You may need to make some tough choices, including letting people go, not paying for some services any longer or restructuring your business, but it can ultimately leave your business stronger and more resilient, so that it’s better able to deal with future challenges.
“The key to effective cost-cutting in a small business lies in a combination of careful consideration, making well-informed decisions and communicating openly with those it affects. It's important to involve key stakeholders, explore creative solutions and continuously evaluate the impact of your cost-saving measures, so that you can judge their success and achieve sustainable results.”