< Back to Blog

6 Tips to Thrive - Tighten the belt on business spending

As we come out the other side of the Covid pandemic, there is still a fair amount of uncertainty as to what the next 12 months will bring. For businesses, it is essential to remain agile and make quick decisions in response to changing market conditions.

It is important that business tighten their proverbial belt and ask themselves whether something is essential or “nice to have”. Here are 6 top tips to help businesses navigate the turbulent market successfully.

What does the business need?

Take a look at business assets, are there vehicles or machinery you rarely use? What you don’t use or need can provide a great cash injection into your business. It is also important to consider which members of staff and functions of the business are essential and which are not contributing to profits. While it is tough to have this conversation with staff, salaries are a huge cost to any business.

Take a look at your transactions

Review your own personal budget and look for areas where you can cut back to keep a bit more “fat” in your bank account. By keeping your own personal expenses in check, you won’t be as stressed if the business struggles for a bit. At the same time, repeat the process for the business, look for expenses you don’t need, a subscription you don’t use, and tighten the purse strings from there.

Monitor your performance

There are great tools like Xero, that can help you do this yourself, so you don’t need to spend more money on an accountant. Get close to the performance of your business so that you understand what areas are contributing to your profits and what areas are not.

Talk to the experts

It is pretty tempting to cut out external help and reduce spending on quality advice in favour of friends. However, sometimes to avoid costly mistakes and invest in the right areas, it is better to spend wisely on solid, quality advice from an accountant than “pub advice”.

Keep an eye on pricing

Now is not the time to be offering discounts and “mates’ rates”, it’s important to maximise any sales that you make during this time. Also, keep an eye on your supplier’s pricing. We have seen supply costs skyrocket globally so make sure you adjust your prices accordingly so you’re not eroding your profit margin. If you’re selling a great quality product, don’t discount it, your customers will see value in what you are selling and are happy to pay for it.

Spend time with family and friends

Business can be stressful and even more so in the current economic environment. That’s why it is more important than ever to unwind and destress with friends and family. They help you keep focused on what matters and offer support and advice while you and your business navigate through this period.

Looking for business advice or help to navigate the post-pandemic business world? Reach out to Lock Finance, we are happy to help.