Wednesday, 21 September 2016

Business Costs - Start up or Established

In my day job I am responsible for running a business with all the financial responsibility that goes with it. It is important to ensure you regularly review costs in order to make valuable savings and keep your business viable, after all its not just you who would be effected with diminishing profits, staffing levels would also suffer, along with the all important morale.


In some of the industries I have worked in it has been a steep learning curve as to what aspects you can cut back on, it is the same for setting up a new business, fixing budgets and ensuring that costs are low and level will aid in cash flow forecasting and plans for expansions.

So here is my top list of areas of business costs you should check and renegotiate annually:

Utilities

Mains Gas Suppliers and Electricity suppliers require the need for a careful eye, ensure you have noted down when each contract comes to an end and either arrange a meeting or book yourself for a telephone conversation to renegotiate in advance, I have often seen companies that have just let bills roll on year on year without a second though about saving money, it is definitely the first on my list to check.

Insurance

Anything from buildings, car, locum or indemnity, I have had dealings with all of them. Most people are under the impression that business insurances do not hold much scope for reducing costs, however over the last two years as the costs have been rising (in the case of indemnity which rose by 33%) the market has changed and savings can be made.

Most of the time renewal quotes offered by insurance companies are usually a few hundred pounds higher than your current costs, it is imperative you challenge them for a re-quote.

Telephones

Most telephone companies start to sneak up their prices year on year both with call costs and line rental, currently I use a two year contract agreement which I insist on a meeting prior to signing up for a further two years, costs in general after the first time I negotiated remain static.


One final piece of advice I would give if you are either setting up business or are already in full swing is to draft up a five year plan. Set yourself a task to review it annually and update it with any necessary changes, I always like to look over past plans and see how the business has developed over the years.  

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