How to cut small business costs in a hurry

Many small businesses are currently under pressure. If you want to know how to cut business costs in a hurry, then check out our article.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Woman calculating figures next to a laptop

Image source: Getty Images.

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.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

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.

Take home

This is a difficult time for many small businesses. If you are struggling and need additional help, you could call National Debtline or Step Change.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »