Tightening Business Belts to Help Navigate Uncertain Times
The past two years have seen businesses eat into their savings, sell their assets, and even managers dive into personal savings to keep the ship afloat. With uncertain times remaining on the horizon and businesses increasingly concerned about their financial obligations, this is the time to reach for the belt buckle and heave it another hole or two tighter. There are plenty of ways in which you can save cash each month to put away in case of an emergency, but here are the three most effective for 2022.
Many business owners see their tax bill as an inevitable and unavoidable sum of cash they’re designed to pay each year. That’s not so, though – while paying tax is unavoidable, the amount you pay is certainly subject to change. For instance, an experienced accountancy firm will be able not only to draw up your tax records in such a way that saves you cash – they’ll also alert you to incentives and schemes your company could take part in to reduce its tax bill.
Examples of these include subsidies for farmers, handouts for technology firms, and grants that’ll help you pump a little extra cash into your business. Experienced tax consultants will know just what you’ll have to do to take part in these schemes and save cash on your tax in the coming years.
Your list of overheads might number ten or 100 items. It’ll range from the huge payments – like your payroll and the rent on your business premises – to the relatively small, like the cash you spend on your office supplies. Some of these costs may be fixed, such as the money you pay your staff. But most may be subject to cuts or even wholesale eliminations.
Take the cash you spend on your business property. You could leave it to set up an online store with remote employees. You could change premises to somewhere cheaper. Or you could renegotiate more favourable rates for rent and utility bills. The same goes for office supplies and technology contracts – cut down on your use so that your overheads only consist of absolutely essential costs.
A point of last resort for many firms, redundancies are a legitimate way to control the amount of cash you’re spending on your business each month. It’s an unpleasant reality that some firms overstretch and need to shrink to consolidate and grow anew. Others see a dramatic reduction in trade during uncertain times and need to lose a member of staff or two to account for that loss of income.
If your long-term prospects aren’t looking rosy, redundancy can help you revive your business with a little extra cash to invest. Still, don’t be too trigger-happy when thinking about redundancies. Uncertain times can also result in a dramatic uptick in sales, leaving you in need of more workers, not fewer. Turn to temporary contracts or freelancers to cover this extra work as it emerges.
Tighten your business belt and keep a tight ship with the three main areas of savings listed above.
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