The current economic climate is tough on businesses large and small alike, and many are crumbling under the pressure of increased overheads and difficult markets. The good news is that it is possible to turn your business around; it is simply a case of knowing how to cut costs in the right places to enable growth and success.
Clearing debts and bringing down costs is essential in turning around your business. Mounting invoices can mean that asset rich businesses could be burying themselves in cash-flow problems. Owning premises can make sense in a booming market where rents are high and office and warehouse space is at a premium. In recession, business rents plummet as facilities struggle to fill their space. Owning your own premises means paying rates, maintenance costs and tying up cash in profitless assets. It can also mean paying for ‘dead space’ you are no longer using. Liquidising your real estate assets can free up money for expansion and growth in other areas, as well as enabling you to pay invoices and clear debt.
The same applies to your corporate fleet. Vehicles are a naturally depreciating material asset. Owning your own fleet might be convenient and good for tax write off in a booming economy, but vehicles in need of constant maintenance, repair and that depreciate in value with every passing month are a financial drain. Hitachi Vehicle Solutions has a comprehensive guide to deciding whether to contract out your fleet, and can help with the logistics of managing the changeover. Contracting out your corporate fleet not only means access to new, well maintained vehicles – it also means you are only paying for the vehicles you are using. Not to mention saving personnel costs on fleet managers and drivers.
Reducing full time staff and taking on contracted workers can save money and streamline your business. The flexibility to bring in experienced personnel with their own resources and skills to manage particular projects or business areas saves on training costs and means that you are not paying for staff who are surplus to requirements. By tendering out sections of the business you are able to take pitches and choose the best people for the job without being tied to pension payments, national insurance and, more importantly, left with extraneous staff during ‘off peak’ business periods.
Releasing funds from liquid assets and streamlining your business by using contractors can make the difference between a failing business and a growing one.