Five ways to reduce business costs and avoid cash flow problems
It’s estimated that up to 61% of small businesses regularly struggle with cash flow, and 32% of their owners report being unable to pay vendors, loans, employees, or themselves. Cash flow problems are one of the main issues small businesses come up against and they can have a detrimental effect on your business.
Luckily, all it takes to prevent cash flow problems is to keep an eye on your bottom line. Being aware of your business expenses and cutting costs will make a big difference to your company’s finances.
When it comes to expenses, such as your bills and supplies, try to negotiate costs to keep them down. It’s worth doing some shopping around to see if you can find cheaper offers. If you do, ring your current provider and ask if they’ll price match. If they say no, look into switching providers because you don’t want to pay any more than you have to.
Make sure you’re not overpaying
In a similar vein, make sure you’re not overpaying for the things you need. Check over your insurance policy to make sure you aren’t over-insured. Also, order only the supplies you need. You don’t want to insure non-existent employees or hoard excess amounts of supplies that will go to waste.
Quality over quantity
If you’re in a particularly vulnerable financial position, focusing on quality over quantity with your products or services can save a lot of unnecessary expense. You want to focus on a few things you do well, rather than spreading yourself too thin and attempting it all. You can work on a few things then, as you bring in more profit, expand into other avenues.
Improve time management
Effective time management may seem obvious, but it can save your business a lot of money. You want to make sure everyone in your business is spending their time as productively as possible. If you’ve got a day of meetings and spend hours of it driving from place to place, is that time well spent?
Explore what’s free
While paid advertising has its perks and can do a lot for business growth, you can still achieve impressive results with little to no expense. Make the most of what’s available for free, such as social media, or SEO, and use that to promote business growth. Networking is another free tool, so try and get out to events as often as you can.
Cash flow problems can be a big concern for any business, but especially for small ones that may be starting out. You want to do all you can to keep your business on good footing financially and to avoid any problems down the line. Luckily, it’s easy enough to keep an eye on your expenses and keep them down wherever possible.
At Big Hand, we offer expert business advice that will help your business be in its best financial position. We can also take care of all your accounting needs so you can focus on your growth. If you have any questions, get in touch on 0161 327 2911.