Recent events have put many small businesses under pressure. If you are in this situation and want to know how to cut business costs quickly, read on.
1. Review your bank account
If you haven’t already done so, a review of your bank account should be your first port of call.
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Make a list of all bank charges and shop around to make sure you have the best bank account for your business needs.
If there are any bank charges that you are unsure of, don’t be afraid to ask questions.
2. Review all debts
If possible, it’s a good idea to repay any outstanding debts to reduce interest charges. If you can’t pay them immediately, make sure you have the best arrangements for any outstanding debts.
It might be worth applying for a credit card with an introductory 0% interest offer on balance transfers and/or purchases. Check out our list of the best 0% credit cards.
3. Negotiate with your suppliers
If you are running a business that relies heavily on suppliers, try and renegotiate terms that will cut business costs.
Remember that your suppliers may well be in the same situation as you. Your survival could be in their best interest, so they could be amenable to renegotiation.
If they won’t negotiate on the price, try asking for an extension on invoice payment dates. While this is not ideal, it can buy you some valuable time.
4. Review necessary running costs
These include rent, gas, electricity, insurance and broadband. Make sure you are on the best tariffs for your business needs. Using comparison sites will make the process a lot quicker and easier.
Try and negotiate a discount on the rent with your landlord, or a payment holiday.
5. Make full use of any government schemes
If your business has been negatively affected by the pandemic, you could be eligible for help from the government.
The furlough scheme has been extended until the end of March 2021. If you have staff, it is worth investigating whether they are eligible.
In addition, check the gov.uk website for any information on additional financial support for your business during the coronavirus pandemic.
6. Consider relocation
This is only applicable if you have a business that you can easily relocate. If you do, then you could cut costs by moving to a cheaper location, or even by working from home.
Rent can be one of the biggest expenses when running a small business. When thinking about cutting business costs, relocation is definitely worth thinking about if it’s a viable option.
7. Review outstanding invoices
Outstanding invoices will have a negative influence on your cashflow and as such are a business cost. Reviewing outstanding invoices is an important step.
You should have an idea of when invoices are due. Make sure you are paid on time and chase up any outstanding invoices that have not been paid.
Good cashflow will ensure the survival of your business. An important part of cutting your business costs is making sure you have a steady income.