The beginning of the financial year is always a good time to take a fresh look at your expenditure—even if you’ve just had a great year. In fact, let me rephrase that, particularly if you’ve had a great year. It’s always worth taking a look at your costs. One of the most dangerous things you can do in business is rest on your laurels. So keep an eye on what your competitors are doing, watch out for new technology, make sure your customer service is up to scratch, and look for new product innovations. You also need to constantly be alert to changes in your sector and potential opportunities or threats. And if you’ve had a good year, you’re at your most vulnerable to becoming complacent. As Andy Grove, the Hungarian-American businessman and one of the founders of Intel said: “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” Reviewing your cost base is one simple way you can check your business isn’t being wasteful. However small or large your business is, there are always ways you can reduce costs in your business. Here are five things to think about:
- Look at your biggest expenses, such as your rent
Are you coming up to a break clause in your tenancy? It might be worth negotiating your rent with your landlord. If you’ve been a good tenant, they’ll want to hold on to you rather than lose you and go through the hassle of looking for someone else.
- Check out your bonus structure
Make sure the people who got the bonuses last year had really earned their money. What you don’t want to do is give out bonuses across the board. Reward the people who really deserve a bonus, otherwise, bonuses might be seen as part of the package, rather than something above and beyond.
- Shop around for your utility providers
See if you can move your electricity, gas, water and internet supply to a different provider. You can find some fantastic deals on price comparison sites, so look into saving yourself money with a quick online search.
- Hire a procurement specialist
If you’re a bigger business, think about hiring someone specifically to look after procurement. By negotiating bulk contracts on stationery, catering, raw materials and so on, people with the right experience save you a fortune, and easily pay their own salary back in the savings they make you.
- Outsource wherever you can
Focus on what you’re good at and what made you go into business in the first place. Whilst it might feel like you’ll save money doing everything in-house, it never works out like that. Get experts in to help you with areas like recruitment, tax, and accountancy that aren’t part of your core business. For your employment law and health & safety needs, you can rely on Peninsula. It’ll always save you time and money in the long run. Take a long hard look at your cost base over the next few weeks and see where you can make savings. It’s better to do it now before the financial year really kicks off. You don’t want to get to the end of the year, look at your spending and think to yourself, ‘how on earth did that happen’? Remember, paranoia is better than complacency.