Take control of your business costs

Control of costs is a must for every business. This is because every business spends money. So, the key question is “are you spending the money as wisely as possible?”  Very often the owner will not be aware of how to make savings.  Cost Control is therefore a fundamental discipline that really matters. Whilst every business is different, there are many areas in common so keeping a close eye on costs can make a huge difference to profits.

Whilst this is not a full list, here are a few tips on some key areas to examine:

Carry out a simple business audit. This can very quickly identify those areas where you can apply some effective cost control.

Staff costs

  • This is often the single biggest area of expenditure;
  • Agency staff will often have a higher day rate than permanent staff. In contrast they can be a very cost effective way of filling short term needs. You should therefore shop around.  They will often do a good deal for long term commitment;
  • Overtime is usually paid at a premium. Therefore look at re-scheduling work to reduce overtime costs.  This is therefore often the most effective form of cost control the one least often looked at.
  • Recruitment & Replacement can be very expensive. It therefore really does pay to retain your staff.  There are many ways of improving staff retention.  You are also likely to incur training & loss of productivity costs when taking new staff on;
  • Training may appear to be an “un-necessary cost” but it can pay huge dividends. These will be in morale, productivity, company reputation and staff retention. So don’t skimp.


There are several areas where you can make savings in this area.

  • Energy costs are often just accepted. There are specialists who will analyse all your utility costs & find savings. Furthermore fees are usually paid on the basis of a percentage saving made – you can’t lose;
  • Rent is often one of the highest costs after staff costs. Do not assume that you are stuck with your rent bills. Similarly there are specialists in this field that can help;
  • Rates relief is available. There are several forms of Business Rate relief available, depending on your circumstances.  You may qualify and it is not difficult to apply.
  • Computer systems may not be as effective or cost efficient as they should be. There are also specialists who will analyse the systems you are using and as a consequence recommend the most cost effective & productive way to use them. Also this does not always mean buying more!
  • Financing is available. There are very many different ways of obtaining, and paying for financing.  Again, there are specialists who can find you the best deal.  This can also often lead to large savings in interest payments.

Materials Costs

This is often the second biggest spend area, after staffing costs.  Cost control of materials costs will often pay big dividends. There are two key activities here that will justify the spend on time and effort to expose issues and reduce costs:

  • The first area to tackle is wastage. Depending on your production process, there will always be a small amount of wastage.  Sometimes, this can be reduced through more effective production planning.  This work will often also lead to reduced processing time. This will enable you to manufacture at lower cost as well, giving a double benefit;
  • The second key area is effective supplier management. Again, there are specialists who can negotiate your supply costs down.  This can often have huge implications.

Marketing & Sales

Measuring the effectiveness of your marketing & sales activity is crucial.  It is also a continuously changing environment.  Specialist help in this area can deliver massive benefits, not just from reducing ineffective spend, but also by changing strategies to deliver more targeted activity.  This can achieve not only reduced costs, but also increased sales.

Other business costs

There are other areas where small to medium businesses often find themselves “over-paying”.

  • Professional advice can be expensive. Are your accountancy, audit or legal bills too high?  They very often are and some sound advice can lead to greatly reduced bills;
  • Banking, loan repayments and lease costs are often a heavy spend area. You can reduce these;
  • Bad Debts are the bane of most small businesses’ lives. There are lots of ways of dealing with this problem, most of which are easy to put in place;
  • Other staff costs can add up to significant sums. Incentive schemes, bonuses, staff benefits such as cars, phones and health insurance are all expensive.  Are you paying the right amounts and are you getting the results you should be?  Very often, incentive schemes have been in place for years and are no longer driving the behaviours you need. They will need updating;
  • Postage costs are often missed as an area for saving. If you send out large amounts of post, you can also take advantage of reduced cost “deals”;
  • Distribution costs, depending on your product & market, may be high. There are also almost always better ways of getting your product to market.
  • Insurance is expensive. Shopping around is very easy to do and will yield cost reductions.


If you are the business owner, you will be too busy to be able to put the time and effort into all of these areas. You will also know that good cost control can lead to increased profit.

The solution is to seek the help of a professional. They will identify the main areas to focus on, also giving you the best savings in the shortest time.

Cost control is crucial and must be a constant activity. Most noteworthy it will drive up your profits.

If you would like some help with managing your costs better, please call or send us a short email. We are always happy to help.