Cutting Costs – Small Business
A while back we featured an article on Causes of Bankruptcy in a small business. Some of the reasons listed were: lack of experience, poor location, poor management of growth, and unnecessary use of business funds. Since this last factor, mismanagement of business funds, can speak to numerous facets of a small business failure we wanted to expand on it further.
It’s not difficult to understand the basic business principal that if you’re spending more money than you’re making, then your business will quickly reach its demise. However, what’s not so easy to pinpoint, at times, is where exactly the money is going and whether or not it’s going towards worth while pursuits and expenses. Knowing the difference between impractical costs and sensible spending is the key to deciding where to trim the fat.
If avoiding bankruptcy is the name of the game, a business owner may have to make a few tough decisions to ensure success. Keeping that in mind, here are a few things to consider:
Buying new vs. used – If you’re pinching pennies and need to replace a piece of equipment to run your business, consider buying used equipment. The cost is always less than buying new and often times used equipment still comes with a warranty.
Selling old equipment – If you have equipment or furnishings that are collecting dust because you’re, “saving them for a rainy day,” consider today to be that day. Selling old and unused appliances and furnishings to a liquidation company opens up storage space and puts a little extra money in your pocket to put back into the business.
Employees – This can be where those tough decisions come into play. If your business is experiencing a lull, don’t be afraid to send employees home early or cut a few people loose. They may not be happy with the loss of hours, but the money you save by not being overstaffed could mean the difference between success and failure.
Hire a good accountant – This may seem like a frivolous expense, but the money a quality accountant can save you by pointing out certain tax cuts and incentives will be worth their nominal fee and then some.
For more information on bankruptcy and ways to succeed as a small business, please visit our website here. Or to learn more about the liquidation services offered by Ideal Trading, please visit our website here.