How important is cost control to a new business?

Everyone knows that for property the answer is location, location, location.  For a new business the equivalent is cash, cash, cash.

Cashflow is vital to help establish and grow a new business, especially in that critical early period. Established businesses also know the importance of cashflow to help keep everything running while you invest to grow the business. If you can’t reach your targets for income, reining in your costs is an alternative to help give you a little extra “head room” to manage cashflow while you’re planning your next move.

Accountants know a lot of ways to improve cash flow.  They can make recommendations on the best ways for you to stay in control of your business cash.

Cost control contributes to business success or failure.  It can be hard to feel in control as business costs work on a number of levels. Do you know how to look for hidden costs or where your established ways of doing things cost you more money than they should? It’s more than just keeping an eye on outgoings (though that’s important).

Cashflow management is another word for cost control. Effective cost control means looking at each aspect of your business and all your business systems (or the gaps where there should be business systems) to see if poor practice is driving costs up unnecessarily.

It can be helpful to break the costs down.

You can review business costs in terms of “cost centres” such as power, IT or office supplies or you can look at what the costs actually do for your business profits. You may find it helpful to analyse costs in terms of cost of sale and overheads.  We wrote this article about how cost of sale & overheads affect your profit

Every dollar of costs saved goes straight to your bottom line profit.

Talk to Bruce Montgomery if you’d like to review your business costs and your systems to keep costs under control. Whether your sales are booming or busting, you want to make sure that while you’re focused on revenue, your costs aren’t ballooning and you’re still delivering on your bottom line.

Chances are we can save you more money, fast, because Monteck Carter know how to quickly find the answers.

Business Forward #67

Other articles you might find interesting

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Tax allowance for meals and accommodation

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