Reviewed: 1st March 2019
Sometimes the cost of running a business can seem to spiral out of control. When your operating costs keep rising, it can be difficult to find the funds needed to keep up with your obligations while still turning a profit.
When it comes to assessing your company’s finances you may begin by analysing your fluctuating business costs – those such as raw materials, transport, shipping, and production costs. However, when looking at areas ripe for cost-cutting, you should not forget about your day-to-day overheads which can quickly mount up to a significant portion of your monthly expenses.
Overheads include things such as property leases, insurance, utilities, and salaries. Essentially they are the outgoings that have to be paid no matter what; the profitability or activity level of the company does not affect the amount or frequency of overheads. As they do not fluctuate much, it is easy to forget about them as you become accustomed to shouldering the cost each month.
Even though overheads are an unavoidable part of running a business, this does not mean that savings cannot be made to help you keep more of your money in your business. Cutting just a few of these overheads can make a serious difference to your cash flow, freeing up vital funds and immediately improving liquidity.
While these suggestions will not be suitable for all businesses, nor is this list in any way exhaustive, here are some starting points to help you get your essential expenditure under control.
While cuttings overhead costs can help your business make significant savings, if your outgoings have already been pared back to the bare minimum or you feel your financial worries go beyond cost-cutting measures, you should talk to a professional for further guidance. A licensed insolvency practitioner will be able to assess your business’s financial situation and talk you through the options available to you.
This may involve a formal insolvency procedure such as a Company Voluntary Arrangement (CVA) to restructure outstanding liabilities, or if the problems have taken the business beyond rescue, options to bring the company to an end will be discussed. With over 70 licensed insolvency practitioners based across the UK, Real Business Rescue are perfectly positioned to help you understand your current position and devise an appropriate plan for the future. Call us today on 0800 644 6080 to arrange a free initial consultation.
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