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9 min read

How To Effectively Manage Your Outgoing Costs

28 July 2017
Written by Jason

Are you in need of short-term finance? You are not alone. Every small business will at some point in their growth need some sort of capital investment. This can be start-up loans, small business loans or in some situations they need a cash injection much quicker and require same day business loans.

The biggest obstacles to small business is managing their costs. Financing a new business can be the biggest headache small business owners face and there are a multitude of reasons why and when financial contractions can occur.

There are ways in which you can pro-actively manage your cost management practices as well as mitigating those difficulties, but for some businesses, the need for emergency funding can happen to even those that operate within their means and have a strong financial projection, whether this is being able to take advantage of market opportunities or economic factors that have nothing to do with the financial structure of the business.

Access Commercial Finance have seen them all and we can offer you advice on how to control your business costs, as well as offering online financial options for those same day business loan emergencies that threaten the success of your small business.

The Difficulty of Managing Costs for Small Businesses
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When small business owners get totally involved in growing their businesses, it is essential to maintain a clear budgeting regime, but when sales are up and things are moving forward it can be all too easy to forget these unexpected costs which can be catastrophic to small businesses without the luxury of deep pockets.

Website - One of the biggest costs involved in a small business is the website. For online retailers this has to been done right, and while there are a million free website templates on WordPress, SquareSpace or Wix, the specifics of a business's needs are often outside of the free website sphere and can cost thousands of pounds.

Office Costs - Moving into new office accommodation may make your new business look professional, but it comes with a cost. Not just the rental side, but decking it out in furniture and buying computer equipment can be a lot more expensive than thought, especially if you start adding new staff.

Financial Planning - Many businesses haven't got a plan, least of all a financial one which can identify when money is being wasted on non-profitable enterprises and when too much money is being thrown at a problem. When a business starts to experience negative wider economic conditions, it needs to be revised and revisited accordingly.

Cash - This can be one of the biggest issues facing SMEs. A lack of cash flow can create huge problems when trying to manage costs going out of the business. A fast-growing company can outgrow their financial resources, and a poorly performing one can't get their hands on it.

Cyber-Security - There is a very real threat for small businesses when it comes to website security. There is a growing concern for SMEs that the targeting of bigger businesses by cyber-crime will start to affect smaller companies, which are more vulnerable and unable to pitch up the costs of restoring frozen or hacked computers. This issue means a greater cost in maintaining website security. SMEs are probably more attractive to hackers precisely because of the smaller budget for their websites, making them inherently less secure.

Increased National Living Wage - The minimum national living wage is continuing to rise and that can put greater stress on small businesses that rely on low-skilled workforces to operate them. Not only does this increase wage bills, but it also increases tax contributions like national insurance as well as pensions and overtime.

The Value of Sterling - While exporters are relishing the reducing value of the pound, it really is a double-edged sword. Those SMEs that rely on imports for their business are finding it increasingly difficult to balance their costs.

Strategies To Manage Cash Flow In Small Businesses
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Owning and running your business is expensive and when the difficulties and costs add up, it can become a business owner's sole role in managing them and finding ways to reduce them, which lessens the time and effort they can spend building and growing the business.  

But if you can minimise your running costs and implement some effective cost-management techniques it can free up more of your time:

Reducing Overheads

Having huge overheads can be critical for a business and even moderately high ones can damage a SME's ability to trade. Your overheads include rent, utility bills, transport costs and stock. Consolidating any utility bills you have including internet and phone can help, as can incorporating together your electricity and gas bills.

Implementing Technology

Using the best technology for your business might seem counter-intuitive (the best tech will cost money), but in the medium term this can help streamline your business capabilities.

CRM Software - Businesses migrating to CRM (Customer Relationship Management) software find that their businesses become more adept at managing and monitoring their customers. By maintaining an organised approach to their customers they can easily spot patterns in buying and ensure that they are contacted regularly. The upshot of this is more sales and increased sales team productivity.

ERP Systems - Your business infrastructure needs to be solid, so incorporating ERP (Enterprise Resource Planning) Systems into your company can align your financial, accounting, inventory, sales, purchase and customer support together. This kind of software is designed to help streamline a business's operations.

Time Management

Ineffective time management is the curse of many business owners. When staff productivity levels are down it sidetracks their attention away from the core business and this cost can add up. Incorporating time-management techniques into your employee’s work schedule can include target-setting or implementing tracking software on vehicles and monitoring phone call rates. For larger companies, assigning project managers can ensure that timescales are adhered to.

Outsourcing

Freelancers offer small businesses the flexibility of working on a project-by-project basis. Which can ensure expertise is applied, without having the overheads of keeping them on after the project finishes.

How Same Day Business Loans Online Work

Sometimes being smart about your overheads and introducing cost-saving initiatives might not be enough of a short-term benefit to get you through. Even purchasing technology or other new equipment that will save money in the medium-term will seem like an expense too far in the short-term.

It is at this point that introducing short-term finance can provide the financial assistance required.

What Do Same Day Business Loan Do?

For businesses, getting instant, timely access to cash can be the most important priority. This is common knowledge; cash flow and capital are immensely important for the day-to-day survival of your business. So when cash flow becomes a challenge, having the ability to apply for a same day business loan online and have access to that money immediately can keep businesses running smoothly.

Short-term business loans aren't for large amounts, typically SMEs apply for a few thousand with repayment terms ranging from a few months to 24 months.

How To Apply For Short-Term Business Loans
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Same day business loan providers usually have an online application form which you can fill out, stating the amount you want to borrow, what you intend to use it for and how much you can afford to pay back per month.

The rates and fees attached to your loan will vary depending on your business's circumstances and financial security.

Removing the Stigma of Same Day Business Loans

It's fair to say that short-term or same day loans have gotten a bad rap in the press, but this shouldn't be confused with business loans, which have a different criteria and don't come with such enormous APR rates associated with the individual consumer market.

The businesses best suited to same day business loans often have the following criteria:

  • Limited companies
  • At least 6-12 months trading history
  • Requiring funds of around £10,000.


A Typical Circumstance To Apply For Same Day Business Loans

Even when a business has a strong sales book. It can affect their ability to stay afloat, especially for businesses in the construction industry where payments often extend to four months or more.

In these cases, cash flow can become so tight that it becomes  difficult to pay off outstanding staff wages, VAT bills and PAYE which can free up a company to continue trading and collect their outstanding debts. In most circumstances, struggling on without external funding often delays the inevitable.

If you recognise any of the difficulties or issues arising from managing your business's costs then you should be actively seeking a solution to your business's cash flow problems. We can help you find finance to help you deal quickly and easily with any problem you have so it doesn't pose a terminal threat to your business.

Originally published Jul 28, 2017 9:21:15 AM, updated July 28 2017
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