Cost-Containing Strategies for Keeping Your Business Afloat

Running a tight ship is an important part of keeping your business afloat amidst the tumultuous economic tides of today’s business world. Assessing your cost containment strategies now can help sail your business into the future.

Analyze Financial Data to Assure Cash Flow

Preserving and assuring a vital cash flow is essential to growing your business. The best place to begin is tracking and analyzing basic financial data.

Be sure you make a point of looking at your books on a regular basis or reviewing your statements from your accountant. If you don’t understand something or notice an inconsistency, never hesitate to ask a question. Remember, this is your money. You have every right to know exactly what’s happening with your cash flow and your business.

Make Changes to Improve Cash Flow

If you need to make some immediate changes to improve your cash flow, consider making any regular payments early if a discount is offered for early payment. Implement check verification/guarantee services or a collection agency to reduce bounced check fees. Consider buying only used furniture and machinery. Always, avoid impulse buying by waiting 3 days before acting on any purchases.

Avoid hiring support staff temporarily. Set an example for your staff and do your own phone and paperwork. Whenever possible, get competing bids for products and services and don’t hesitate to negotiate. Run through your costs and see what can be reduced or eliminated.

Tracking Your Expenses

For long-term containment, consider tracking your costs by work order or job cost. This lets you prepare an income and expense statement for each job rather than losing details in the overall picture. Be sure to audit major operating expenses regularly. Consider working with other shipping, telecommunication and service providers who may offer you a better deal.