Failure to control finances is one of the primary reasons businesses fail. Costs reach beyond the company’s control and cash flow leaves the bank in a higher volume than it is replaced. Businesses can take a number of steps to reduce costs in this tenuous economic climate. Some practical methods a business may take to prevent folding follow:

Utilities – Many businesses miss out on large savings by sticking with their current natural gas and electricity suppliers without ever comparing. It’s rather simple and using a broker will provide a broader range of tariffs. Take note of when your contract ends with a current supplier because many offer only a short amount of time in which to cancel before locking you in for another long-term deal.

Outsourcing – Non-critical functions such as IT, HR, and finance can be outsourced, resulting in significant savings. Certain industries may also look to outsource manufacturing, distribution, or customer service to places such as India or the Philippines to heighten savings.

Banking – Remember that your bank charges are not fixed in stone. There are a number of areas where banks profit from your business and you should look to minimize these. For example, what interest rates are you being charged? What are you receiving for any accounts in credit? Lots of banks have different levels of clients, and paying a higher monthly fee may result in a lower cost overall through reduced transactional fees.

Business Rates – The rates that your business pays can be challenged every five years and you shouldn’t assume that they won’t change. You can challenge this yourself or use a specialist consultants. If using a consultant, ensure that they don’t charge an upfront fee. What you want is to only pay them a charge that relates to the savings that they make for you.

Telecoms – As a results of the telecoms market becoming deregulated, there’s plenty of companies competing for your business. You should be able to easily save 10-15% off your line rental if you’re with a large provider, and often even more on call charges too. Always remember to compare like for like rates and review your provider and their competitors on a six monthly basis.

Office Stationery – Try to buy from one source by combining suppliers and invoices. You will increase the ability to negotiate with just one supplier and getting involved with a buying group will further help your cause. Keep track of materials you are using and do not allow a large number of people the ability to reorder. Savings of up to 25% can be attained by using products from your own brand.

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