Why you must control costs within your business

Why you must control costs within your business

There are warnings out there in the general economy about an on-coming recession. Thoughts turning toward dropping values, and other worries. That may be the case, for some, but there is also so much that is good, really good, just now. Many business owners are finding trading conditions, investment opportunities, and availability of finance better than they have experienced in a very long time. There is a widespread feeling of confidence.

Our MD, Matt Donnelly, has a saying which keeps us grounded, “Good habits are sown in bad times, and bad habits are sown in good times”. So, if things are good for you and your business right now, please stop and think . . . . . Are you collecting bad habits in the way you manage your business and your finances?

The one thing we should always be aware of is cost-control. When things are good, it is so easy to become complacent about cost control. Too often attention is only brought back to cost control when things turn sour. Instead of waiting for things to deteriorate, how about this suggestion – even in good times, keep a close eye on costs, and constantly ask how you can make your business more efficient and more productive. Improvements will never be regretted in good time or bad times for they will keep you ahead of the competition at the same time as ensuring your business remains financially solid.

Controlling costs allows you take advantage of opportunities

ad+ Chartered Accountants would like to help you review your costs. We’ll help you to categorise your costs between fixed costs and variable costs. Next, we’ll challenge the assumptions behind those classifications because that distinctions is important.

We’ll then go on to identify the main cost drivers within your business, and we’ll explore how we can help you to control those specific cost drivers. Your products and services will be far more competitive, and will remain more consistently profitable, when you effectively manage the main cost drivers. Some cost do have a disproportionate impact on profitability, but many owners owns do not have accurate timely management reports to understand them.

Once you have the main cost drivers under control you will be in a position to take advantage of opportunities when they arise.

Get in touch with David Charles to arrange your initial discussion with one of our Chartered Accountants to learn how we could help you manage your costs. We can help you design and implement bookkeeping systems to give you accurate data upon which you can build your management information system.

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