When it comes to cutting costs and increasing revenue, having a business plan pays off. Unfortunately, far too many companies overlook the importance of planning for the future, which can often prove to be a costly mistake. In fact, a study conducted by the Centre for Economics and Business Research found that more than a quarter of small to medium-sized enterprises in the UK start the new year without any revenue goals or plans to manage their cash flow. To avoid falling into common financial pitfalls, here are three things that could cost your company in 2016.
- Power outages
One expense that many companies fail to prepare for is power cuts. Not only can the sudden loss of electricity disrupt daily operations, it can also result in the loss of potential business and sales. Even a small disruption lasting a few hours could cost your company big. To save your firm from financial losses, having a backup source of power is an essential safety net. In the event of a blackout, a backup power generator can help to reduce downtime and get your firm back up and running as fast as possible, saving you both time and money. To find out more about the different types of power generators available for businesses, you can check out specialist sites such as www.adeltd.co.uk.
- Not negotiating with your suppliers
Another notable outlay that is often overlooked by business owners is failing to get a good deal from suppliers. All too often, companies simply accept the first offer they see without considering whether the price is too high. However, if you want to stay within your budget and reduce unnecessary costs, you’ll need to harness your negotiating powers – and a little bit of planning can go a long way. Start by thinking carefully about what your priorities are. For example, do you want to get the least expensive options or is the quality of the goods more important? Before you sign a contract, it’s also a good idea to do some in depth research to get an idea of what you should be paying.
- Employee turnover
As the mainstay of your business, your employees have a significant impact on your profits. An unhappy, demotivated workforce can result in low morale, diminished productivity and a higher staff turnover rate, all of which are bad news for your bottom line. Recruiting and training new staff members takes time and can be a serious drain on your cash. With that in mind, it’s imperative that you make efforts to keep job satisfaction high. To improve employee retention, take the time to listen to their needs, reward accomplishments and provide a comfortable work environment. If you do this, you should end up with a more stable and productive team.
With plenty of planning and forward thinking, you should be able to avoid any financial shocks further down the line and promote the growth and success of your company.
