Wednesday, 21 March 2018

Information and commentary for the small business banking industry

How small businesses can reduce costs

29 Jul

You’ll probably have noticed this cropping up often when you’re talking with your small business customers – they’d like to increase their cash flow and find ways to reduce costs. Well, there are almost always things they can do to cut back on their expenses, and they’ll appreciate your sharing these tips with them.

The first thing they need to do is identify the areas they’re spending the most money. Then review them to see if they can save money. For instance, if they’re doing their own payroll, not only is it time-consuming and stressful, it’s taking them away from more profitable activities, so they could look at outsourcing that task.

They can also take a look at their staff and see where savings can be made, such as employing someone on a part-time basis instead of full-time, especially if the workload justifies it.

Overheads are another big area where it’s easy to pinpoint savings. They can shop around for better deals from energy and insurance suppliers, as well as making the most of technology to streamline processes. When it comes to their raw materials, it’s often worth negotiating with their suppliers to see if they can get a better deal, such as longer credit terms.

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