Be smart in cutting costs, says expert
CUTTING costs remains a primary concern for many small local businesses, but timing and targeting the right areas for potential cuts is crucial.
That’s the view of Mark suthern, head of local business, Eastern, at Barclays Corporate, when considering the tough times being faced by firms.
“It’s important not to get too excited,” he said, on the news of the UK’s exiting recession. “The road to recovery will inevitably be a slow one, but there are valuable lessons to be learned that could stand firms in good stead for the future.”
Business owners are feeling pressurised by these tough times, as highlighted in a recent Barclays survey, in which 66 per cent cited the economic climate as impacting most on how they felt about their business.
Mr suthern said: “Unfortunately, there is no instruction manual or hard and fast rules in which to survive a recession, as all businesses have their own individual characteristics, but there is support out there, especially from us here at Barclays.”
On the subject of cost cutting, staff training, marketing and PR are often the first areas which firms look to slash, but these can often be tools utilised to strengthen the long-term future of a business.
Mr suthern claims staff expertise and knowledge is paramount to a successful and efficient business offering. Marketing and PR doesn’t need to be expensive.
“Think outside the box when embarking upon campaigns,” he said. “These are classic knee-jerk reactions that must be properly thought through before implementing.
“don’t get me wrong, cutting costs has been a vital element for firms surviving the recession, but it is those SMEs that have pre-empted the downturn and cut costs in the right areas before the situation has become too serious that has made them stand out from the crowd.
“Indeed, smaller businesses that pursued active marketing strategies, or at least kept them steady, have tended to do well, and networking has proved to be an important activity in promoting and protecting the business.
“It is also vital to really look after your core clientele and communicate with them to ensure they are getting what they need to maintain business levels.”
Mr suthern added: “It is inevitable that some people will stop using you, for whatever reason, but it is one of the biggest sins to neglect existing customers by focusing too much on establishing new ones. In times of recession, it is all about ensuring firms maintain a happy medium.”
In terms of saving on costs, another factor to assess was something as simple as ensuring that a business was paying as little tax as possible, he said. If a small business was being run from home, then really examine if you are claiming enough tax liability. Bills such as council tax, utilities, broadband, mortgage interest and others may be applicable to claim upon.
It is paramount that we learn lessons from the last recession and continue to apply these to our business strategies today. Hopefully, we won’t have to deal with such a downturn again anytime soon, but as with most things in life, to be forewarned is to be forearmed, he concluded.
maintain a happy medium: Mark Suthern, head of local business, at Barclays Corporate, advising firms in these tough economic times.