My business costs are too high, what can I do?

1. Review your overheads

Make a list of all your main cost areas to work out how much you're spending on a weekly, monthly and yearly basis. This is likely to need to cover: premises; equipment; stock; wages and salaries; rent; fuel; VAT; marketing; and professional fees. Doing a cash flow forecast can help you approach this. Now consider whether it is possible to reduce each one, without adversely affecting your current quality of service.

2. Buying versus renting or leasing

Price wise now is a good time to buy property, so if possible, take advantage of this. It's important to think about all your options and do the maths. For example, if you rent your premises and your lease is due to end, shop around - prices of commercial leases are currently dropping. Could you negotiate harder or move premises? Look at the cost of owning your property through a Commercial Mortgage versus renting. This could be more beneficial to you in the long term and with low fixed rate commercial mortgages available – the cost of financing your own commercial property could be both predictable and lower than it has been in many years.

If you are buying equipment don’t automatically use your cash. Consider a loan, leasing or even renting. These can be significantly less draining on your cash than purchasing it right out. A Barclays Local Business Manager would happily talk you through your options.

3. Negotiating with suppliers

Shop around, and then be prepared to renegotiate with your suppliers. Many of them will be especially keen to keep your business, so you are in a strong position.

Where possible, seek 'win win' situations. For instance, if you buy materials which are then used on a site elsewhere, ask your supplier to deliver them directly to where you need them. This will save you transport costs and will make little difference to your supplier's costs.

4.Keep an eye on your stock

Good stock management is key in business as it saves costs and benefits your profit.

Ask yourself, am I getting maximum value from my purchase of stock and raw materials? What is my best selling item or service, and what stock or raw materials do I need to deliver it? Think about whether you would be better to buy it in bulk or perhaps use your buying power to get a better deal?

Regular stock-taking confirms what you have available for sale and enables you to better meet your customers' requirements. It also helps you to identify internal issues, such as 'shrinkage' or theft, and you can act on the information.

Many businesses lose money through having to re-order stock that has past its expiry without being sold. If you sell items that are perishable or that deteriorate, make sure you have a re-stocking system in place that means that the older items are used first.

Business software like Barclays Business Manager and Barclays Business Essentials Plus will help you to understand where your business makes the most profit and to manage your stock effectively.

Most cost-saving measures are common-sense. However, they do take some thinking about, so make sure that you give yourself enough time to consider each option regularly.

If you do your homework and your maths you'll either find more cost-effective ways of running your business, or be reassured that at this time, you couldn't be running it any more efficiently and turn your attention to generating income until your next regular review is due.

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