All businesses are taking extra care with budgets and there is no room for waste. However, because small businesses don’t benefit from the same economies of scale as large businesses, it’s even more critical to take control of the budget. Why not spend a few minutes working your way through this checklist in case there are any new ideas you haven’t tried yet?
Most businesses work to targets, whether that’s a sales target, or a footfall target. So, a good way to motivate yourself to improve your budget control is to set yourself a reduction target. For example, if you set yourself a five per cent budget reduction target for the next year, then that is much more likely to motivate you into sitting down and looking for areas to cut. To ensure that you’re on track, it’s a good idea to put regular budget slots in your diary. That way, you have time planned to deal with budgetary matters.
Gas and electricity prices can be a worry but there are lots of ways to cut down on usage. For example, take a look at your opening hours. Many small business owners are on the premises a long time before opening and a long time after closing. Consider whether this is really necessary, or whether you’ve been drawn into the habit. If you’re not the first in and last out, make sure that your employees aren’t falling into the habit of face time at the cost of your power bills. To get a better idea of power peaks and troughs, invest in a small wireless monitor. This can be installed in minutes and only costs a few pounds. Very quickly, you will be able to establish whether power usage is matched by productivity and you’ll be able to adjust your opening hours accordingly.
No one likes to cut staff hours or lay people off. However, in difficult times, sometimes there’s no choice. Before going ahead, it’s worth finding out whether anyone would like to reduce their hours voluntarily. It may be that one or more of your staff would like to work shorter hours so they can pursue another interest, take a part-time course or spend more time with family. Before taking any action though, it’s well worth checking the ACAS website to make sure you’ve taken account of all the ins and outs first.
Scrutinise your suppliers and determine whether you could get more for less money. Many suppliers rely on customer inertia to get away with pricing that is less competitive than it might be. Even if you’re otherwise happy with your suppliers, it’s worth opening up discussions. They may be willing to cut a deal with you as it’s usually cheaper for them to retain loyal customers than it is to go out and find new ones. Work your way methodically through every supplier, from your gas provider through to the window cleaner and get the best deal you can.
Don’t be Stationary with Stationery
Carry out an audit of working practices and ask yourself (honestly) whether they’re as effective and efficient as they might be. For example, if you regularly send out festive cards to your customers, consider whether an electronic message might be just as well received. This will save a small fortune in time, stationery and postage. Similarly, if you regularly send customers reminders and other letters, why not think about putting in place an email reminder system? Again, this saves time, stationery and postage and may well be more convenient for your customers.
By setting aside a small amount of time on a regular basis, it is possible to make a significant difference to your outgoings. Keep up the good work by scheduling a yearly budget meeting with yourself to review the year ahead and ensure that your business is not paying out more money than it needs to. That way, you can minimise the impact of annual inflation on your company.
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