Tag: cut costs

Don’t let costs embed themselves in your business – go on a fossil hunt!

We looked at how costs and processes get embedded in a business and stay there, like fossils, for years and years, eating up cash, when they don’t need to be there at all!

This is a “physician – heal thyself” post about cost control and the processes that build up in businesses over the years!

Some time ago I ran a workshop for MDs about good financial management and one of the sessions looked at how costs get embedded in your business and stay there, like fossils, for years and years, eating up cash, when they don’t need to be there at all!

Fossilised costs, we call them.

They exist everywhere and sometimes you need to go on a fossil hunt and clear them out!

We had a fossil hunt several years ago when we had to move offices. Our landlord gave us a 100% rent increase and we decided to move out.

At which point we looked at what we needed in the new office, compared it with what we had and what it cost and thought “how did we let these costs build up without challenging them?”

In any business it’s worth standing back from time to time and asking whether you need everything you’re buying and whether you are buying at the right price.

Look at everything from people to premises, phones, stationery, storage, subscriptions and anything else you spend money on.

 

It’s not just cost control – look at processes and workflow too

Also, look at your processes and see if you can’t change the way you do things and be more efficient.

One outcome of our office move is that we decided to go “paper-free”. This saved a huge amount of time and money each year because we didn’t have to archive paper files and it led very quickly to putting our entire business into the cloud.

Costs and processes become habitual, “we do it this way because we have always done it this way”, and you take them for granted.

An expensive mistake.  Check your workflow processes, increase profitability and make more money.

Cost control – it all starts with a fossil hunt!

 

 

Michael
Sales | Margins | Profit | Cashflow

 

Can we help you to reduce costs and improve your profits? Give us a ring on 020 7125 0270.

 

Profits, cashflow and getting paid – the more things change, the more they stay the same!

Business basics don’t change, we simply become more or less complacent about them. Now is not the time to be complacent.

Elections, inflation, disruptive technology such as AI – uncertainty increases but what can you do?

The simple answer is to get the basics right and there’s a great chance you’ll be fine. There are three things to concentrate on.

Profits, cashflow and getting paid.

Increase profits

Up to you how you do it, but the options include:

  • increase sales and margins
  • cut costs
  • be more competitive

But keep a very careful eye on your margins. Try not to “buy” sales with low margins but do think about saying goodbye to unprofitable clients or services. Discarding the deadwood can allow you to reduce overheads, spend more time on marketing and improve profits.

Cash is king

Heard it before? Of course you have and the reason is that it’s universally true.

There are two types of business:

  1. Those that are well-funded and consistently profitable. They can get by without a cashflow model. Not wise, but probably not harmful.
  2. The rest. That’s most businesses. If it’s you and you don’t have a cashflow model – start one today.

Get paid in good time

“A sale is a gift until it’s paid for”.  This is no time to be too polite about getting paid and here are seven quick steps to better credit control:

  1. Credit vet your prospects and current clients – a monitoring service that tells you about CCJs would be helpful.
  2. Have a good set of terms & conditions that you get clients to sign.
  3. Invoice clearly, in good time and for the correct amount. Don’t let an incorrect invoice become an excuse for it not to be paid.
  4. Send invoices by email so they can’t be “lost in the post”.
  5. Be very active at chasing for payment. Calling is better than writing, certainly for the bigger debts.
  6. Employ a “pincer movement” where you chase the person who bought from you as well as chasing the accounts payable department.
  7. If it comes to it – sue for your money (got to give those CCJ monitoring services something to monitor!).

Profit, cashflow and getting paid – Back to business basics

This blog could have been written at any time in the history of commerce. If Gutenberg had published it he may not have been made bankrupt!

Business basics don’t change, we simply become more or less complacent about them. Now is not the time to be complacent.

Michael

And if you need some help with the business basics then there are a number of our blogs that can give you some practical hints and tips, or perhaps give us a ring on 020 7125 0270.

Related links:

Profit improvement

Cashflow

She’s a bulldozer when it comes to credit control and getting paid

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