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We know that in small business, times can be tough, and saving a few dollars here and there can equate to thousands and even tens of thousands over the course of the year. Lowering your expenses can mean more money to reinvest back into the business, or even better – more money in your pocket!
Regularly examine your business bank accounts/credit cards & don’t be afraid to haggle
It’s safe to say that the banks always win. Whether it be interest rates, annual charges or transaction costs, there always seems to be one charge or another popping up on your statement. This is not such a bad thing if you are a bank shareholder, but if you are a small business owner those charges can be painful.
Be sure to meticulously check every single bank statement that comes across your desk. You are looking for fees, costs and/or interest charges that are either higher than you need to pay or altogether wrong. Banks make mistakes too, and sometimes you may be charged incorrectly. You also may be paying additional interest or costs if you are not making repayments on the right dates and this can add unnecessarily to your expenses.
Call around to some of the other banks and ask what they charge for an equivalent account. You might be surprised at what they are willing to offer. You then also have bargaining power with your own bank – banks hate to lose customers and there is often a little room to move on charges and costs. By understanding what options existing in the market you can simply give your bank an ultimatum; either come to the party with a better or similar offer and keep my business, or I will go elsewhere.
Consult an insurance broker for Business insurance
Many people are hesitant to go to a business insurance broker because of the cost, or simply a lack of understanding about what a broker can actually do. In Australia, most business insurance brokers are able to access & negotiate with many different insurers and re-insurers in the market. Not only does a broker have more buying power with an insurer than you will as one person, but they know the technicalities of the products better than anyone, and can steer you towards and away from policies that may seem cheap or efficient at face value, but will simply cost you more (or worse; be un-claimable) in the future. Better yet, a business insurance broker may also be able to package up your cars, home or other insurances that you may not have considered.
Don’t buy supplies in bulk – unless you truly need them
It seems like a simple and perhaps silly statement to make, but truth be told many small business owners buy their supplies in bulk because it seems less expensive to do it this way. Unless you really need something or have a very large business using certain items extremely frequently, buying in bulk can cost you more. You may purchase something that is out of date or warranty by the time you need it, you will have to store it and you may change your business model before you use it and then it becomes redundant. You are also much better using that cash-flow in your business to reduce short term interest expenses (like credit cards or business loans), rather than spending it on hundreds of reams of paper that you won’t use for a year.
Consider an intern
We all know that job descriptions in most small businesses are like the northern lights; we know they exist and we’d all like to see them, but for the majority of busy people it’s just not within our reach. In most businesses, owners and managers will try to absorb a role into an existing position in order to save on costs and also training. This can often mean the owner is left juggling balls that they really should be. But there is a way to bring fresh, enthusiastic talent into your business at a fraction of the cost and that is to take on an intern. Students the world over at varying levels of study are always looking for practical job-based training.
Most university courses now require ‘on the job’ training as part of their academic requirements. These interns often work for small payments (and often even none at all), in order to access hands-on training to further their future job prospects or condense their academic learning. We highly recommend contacting a university department in your field of interest and offering to have an intern for a period. Most will offer short term project placements for periods such as summer and winter holidays, or longer term positions over a few months at a few days per week. The beauty of offering a placement position is that you are not obligated to continue the internship when it finishes if the person you have had is not suitable, but if they are brilliant you can catch them early and offer a part-time or full-time paid role before they hit the industry proper.
If you would like to see how a Chartered Accountant can help improve your business bottom line, please call our office on (03) 9999 7200 or contact us here to arrange an appointment with a small business specialist.