Business costs are going up !

Every year our costs seem to go up but the market place will only support a certain max. day labour rate we therefore have to be performing at the highest level of effectiveness in running the business to ensure that we get best value for our money.

Take bank charges for example - nearly a pound to bank each cheque - consider having a second business account where they offer 1 - 2 years free banking and then transfer money to your main business account once a month. Ask clients to pay on-line or by standing order - these attract reduced banking fee's.

Shop around for the best deals on equipment and don't be afraid to ask for discount.

Email clients rather than posting quotations, news letters etc. This alone is saving me a few hundred pounds. Use Jpeg logo's rather than preprinted stationary.

One of my biggest expenses is fleet insurance and nearly every month I try to see if I can reduce it!

Material costs are very much out of our control other than shopping around for best value and ensuring that a sensible mark up is added.

Work on your cash flow / credit management and watch out for any likely bad debts.

I did read in the Landscaper that labour rates have actually come down in certain sectors of the business. I try to keep my labour cost to 40% of the daily income but on some days it can be as high as 60%.

When quoting it is important to get the right price for the job and at times, it is cheaper in the long run to decline to quote or loose the tender rather than going in too low.

Replies

Graeme @ BGS October 5, 2009 at 2:54pm

Every year our costs seem to go up but the market place will only support a certain max. day labour rate we therefore have to be performing at the highest level of effectiveness in running the business to ensure that we get best value for our money.

Take bank charges for example - nearly a pound to bank each cheque - consider having a second business account where they offer 1 - 2 years free banking and then transfer money to your main business account once a month. Ask clients to pay on-line or by standing order - these attract reduced banking fee's.

Shop around for the best deals on equipment and don't be afraid to ask for discount.

Email clients rather than posting quotations, news letters etc. This alone is saving me a few hundred pounds. Use Jpeg logo's rather than preprinted stationary.

One of my biggest expenses is fleet insurance and nearly every month I try to see if I can reduce it!

Material costs are very much out of our control other than shopping around for best value and ensuring that a sensible mark up is added.

Work on your cash flow / credit management and watch out for any likely bad debts.

I did read in the Landscaper that labour rates have actually come down in certain sectors of the business. I try to keep my labour cost to 40% of the daily income but on some days it can be as high as 60%.

When quoting it is important to get the right price for the job and at times, it is cheaper in the long run to decline to quote or loose the tender rather than going in too low.
PRO

Nick @ NM Garden Services Ltd October 5, 2009 at 6:07pm

To reduce bank charges try Alliance and Leicester which offer free business banking or join the Federation of Small Businesses which also offer a free bank account with the Co-op.

Always phone around for deals on insurance and don't worry about playing one insurance company off to another.

Small savings made up over a large number of areas all add up quite quickly!
Sustainable Land Management October 5, 2009 at 6:32pm

As always Pro Gard spot on with commentary - what can we do that isn't already being done apart from continually highlighting the situation until the clients pick up on it. I do love the French solution - just stop paying and set light to few things, shout and then go drink a bottle of wine. The stoicism of the British is amazing - take South West water, they dig up newly laid roads, do little to improve their services but annually hike their costs up until now the South West pay more for their water than people living in the Sahara do?!?. Occasional grumble little more.

No surprise that most UK services are paying bought up by French companies.