The price comparison and switching site uSwitch.com has launched a service to help Britain's estimated 4.7 million small businesses obtain a better deal on energy. The move is in response to growing numbers of calls from SMEs keen to cut costs because of the recession. It is claimed the service – www.uswitchforbusiness.com – could help SMEs save up to 50 per cent on energy bills.
Businesses can go online or call 0800 051 5343 to get information and a quotation on the best deal for their needs. Just as with households, estimates are based on the company's energy consumption and are given after comparing the latest tariffs provided by a range of energy suppliers and selecting the most competitive rates.
The average SME electricity bill is just over £2,500 per year, while the average gas bill is just over £3,200. Although many owners run their business from home, about 3 million SMEs have stand-alone business premises and may be locked into a contract with a supplier. These contracts come up for regular renewal, but only a third of SMEs check the market before signing their next contract. As a result, they often end up paying too much for their energy.
www.ukba.co.uk
Showing posts with label cost reduction. Show all posts
Showing posts with label cost reduction. Show all posts
Monday, 3 August 2009
Sunday, 5 April 2009
Save money by switching energy suppliers
More than seven out of ten small businesses think that changing energy suppliers will save them money, but only 43% have actually taken action, according to research by uSwitchforbusiness.com.
The research found that cost is the number one factor that small firms look at when choosing an energy supplier, with concerns over customer service and environmental issues becoming less important in the recession.
The survey also revealed that the average small company pays more than £2,500 a year on electricity and faces gas bills of over £3,200.
www.ukba.co.uk
The research found that cost is the number one factor that small firms look at when choosing an energy supplier, with concerns over customer service and environmental issues becoming less important in the recession.
The survey also revealed that the average small company pays more than £2,500 a year on electricity and faces gas bills of over £3,200.
www.ukba.co.uk
Tuesday, 17 February 2009
Survive the Downturn - Review Your Structure & Cost Base
Extract from ICAEW report: 8 Ways To Survive The Downturn
Find out how reviewing the structure of your business can help you survive the downturn and take advantage of the upturn when it comes.
Now is a good time to review the structure of your business critically. Do you have the right business model to see you through the recession and put you in the best possible position to take advantage of the upturn when it comes?
Current economic circumstances may present opportunities and allow you to make changes that were previously difficult or unpalatable. If you need to make savings, examine carefully how you can get the best value out of your business and enable your business to emerge leaner and fitter at the end of the recession.
Think long-term
Avoid making across-the-board or short-term cuts which may damage your business over the long term.
Focus on key areas and activities which are business critical for the future to ensure your business emerges in good shape from the recession. Are there activities you could stop? Is outsourcing, offshoring or relocation a possibility?
Consider spending cuts carefully
Consider carefully before cutting your spend in apparently ‘soft’ areas such as marketing, IT or corporate responsibility. Think about the value of expenditure not just its cost. For example, research shows that in a downturn the winners continue to invest in their brand and build their reputation and profile with their key stakeholders.
It has been well documented that ‘brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times’*.
Consider carefully which products and markets are most valuable to you. How can you reach these markets most effectively? Focus your activities and marketing investment to protect your most valuable markets and customers for the long term.
*John Quelch, Harvard Business School
Source ICAEW - full report can be downloaded by clicking here.
Find out how reviewing the structure of your business can help you survive the downturn and take advantage of the upturn when it comes.
Now is a good time to review the structure of your business critically. Do you have the right business model to see you through the recession and put you in the best possible position to take advantage of the upturn when it comes?
Current economic circumstances may present opportunities and allow you to make changes that were previously difficult or unpalatable. If you need to make savings, examine carefully how you can get the best value out of your business and enable your business to emerge leaner and fitter at the end of the recession.
Think long-term
Avoid making across-the-board or short-term cuts which may damage your business over the long term.
Focus on key areas and activities which are business critical for the future to ensure your business emerges in good shape from the recession. Are there activities you could stop? Is outsourcing, offshoring or relocation a possibility?
Consider spending cuts carefully
Consider carefully before cutting your spend in apparently ‘soft’ areas such as marketing, IT or corporate responsibility. Think about the value of expenditure not just its cost. For example, research shows that in a downturn the winners continue to invest in their brand and build their reputation and profile with their key stakeholders.
It has been well documented that ‘brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times’*.
Consider carefully which products and markets are most valuable to you. How can you reach these markets most effectively? Focus your activities and marketing investment to protect your most valuable markets and customers for the long term.
*John Quelch, Harvard Business School
Source ICAEW - full report can be downloaded by clicking here.
Sunday, 1 February 2009
Profit is sanity
‘Turnover is vanity, profit is sanity’ – so the business saying goes. But what does that mean in practice? In an economic downturn, sales often start to fall and so businesses scramble to replace this lost turnover.
Competition intensifies and prices are cut to win business. But instead of replacing lost turnover to help cover your costs, you have unwittingly taken on unprofitable business that will leave you with a loss.
Is that new business worth it?
• Cost each product or service: do not take on business if it does not make a profit
• Look at ways to reduce costs: this will allow you more scope to reduce prices
• Be wary of big orders: this can lead to overtrading when the business takes on more work than it can handle and runs out of money to finance it
Maintain Profit Margins
The flip side of price is cost – you can maintain profit margins even if you are reducing prices, provided you also reduce the cost of what you are making or providing.
It is vital to keep overheads down but avoid cutting:
• Stock levels to such a low point that you cannot fulfil new orders
• Staff you need to run your business
• Sales and marketing expenditure which you need to attract new business
• Investment in equipment or product development that enables you to remain competitive
• Insurance as you could leave your business inadequately covered
On cutting costs...
• Don’t get emotionally involved. Make hard-headed business decisions. You may want to keep a particular office open because it was where you started or a certain product line because you created it. If it is losing you money, you have to lose it – or risk losing your business.
• Make decisions based on the facts. A “gut feel” is not good enough. It is only when you see what is profitable and what is not that you can make a decision.
• Start with non-essential expenditure – then tackle fixed costs such as utilities, stationery and other outgoings.
• Pass on price cuts. If you are under pressure to cut your prices ask your suppliers to do the same – if you can. If they won’t negotiate on price ask for longer payment periods or shop around.
Are you making the most of management information?
Knowing which products are going to sell best and bring in the most profits and which costs are rising and could hit your margins, is vital. For that, you need to have the right management information.
The key difference between this economic downturn and the recession of the early 1990s is information technology.
The Key Barometers
There are usually four or five barometers that indicate the health of any business. You need these to be annual rolling totals either on a monthly or even a weekly basis. Check the actual figures against those forecasted and against the previous year’s. These key indicators will vary from business to business but could include:
• Turnover – not just the total but some key figures.
• Enquiries – or foot traffic, number of visits to your website or another key indicator of interest in your product or service.
• Stock – if too much of one item is piling up it is a reflection that sales of that particular product are falling. The danger is that too much cashflow will be tied up when you need it for day-to-day needs.
• Costs – keep track of how these are rising. As has been seen in recent months, some costs – such as fuel – can rise rapidly.
• Late payments – you need to keep a daily eye on how quickly money is coming in so you can spot potential problems early on.
Then you need to act on the information. For example, by selling off surplus stock or putting up prices to reflect rising costs.
[Extract from Trading Through The Economic Downturn - published by NatWest - full Guide available by clicking here]
http://www.ukba.co.uk
Competition intensifies and prices are cut to win business. But instead of replacing lost turnover to help cover your costs, you have unwittingly taken on unprofitable business that will leave you with a loss.
Is that new business worth it?
• Cost each product or service: do not take on business if it does not make a profit
• Look at ways to reduce costs: this will allow you more scope to reduce prices
• Be wary of big orders: this can lead to overtrading when the business takes on more work than it can handle and runs out of money to finance it
Maintain Profit Margins
The flip side of price is cost – you can maintain profit margins even if you are reducing prices, provided you also reduce the cost of what you are making or providing.
It is vital to keep overheads down but avoid cutting:
• Stock levels to such a low point that you cannot fulfil new orders
• Staff you need to run your business
• Sales and marketing expenditure which you need to attract new business
• Investment in equipment or product development that enables you to remain competitive
• Insurance as you could leave your business inadequately covered
On cutting costs...
• Don’t get emotionally involved. Make hard-headed business decisions. You may want to keep a particular office open because it was where you started or a certain product line because you created it. If it is losing you money, you have to lose it – or risk losing your business.
• Make decisions based on the facts. A “gut feel” is not good enough. It is only when you see what is profitable and what is not that you can make a decision.
• Start with non-essential expenditure – then tackle fixed costs such as utilities, stationery and other outgoings.
• Pass on price cuts. If you are under pressure to cut your prices ask your suppliers to do the same – if you can. If they won’t negotiate on price ask for longer payment periods or shop around.
Are you making the most of management information?
Knowing which products are going to sell best and bring in the most profits and which costs are rising and could hit your margins, is vital. For that, you need to have the right management information.
The key difference between this economic downturn and the recession of the early 1990s is information technology.
The Key Barometers
There are usually four or five barometers that indicate the health of any business. You need these to be annual rolling totals either on a monthly or even a weekly basis. Check the actual figures against those forecasted and against the previous year’s. These key indicators will vary from business to business but could include:
• Turnover – not just the total but some key figures.
• Enquiries – or foot traffic, number of visits to your website or another key indicator of interest in your product or service.
• Stock – if too much of one item is piling up it is a reflection that sales of that particular product are falling. The danger is that too much cashflow will be tied up when you need it for day-to-day needs.
• Costs – keep track of how these are rising. As has been seen in recent months, some costs – such as fuel – can rise rapidly.
• Late payments – you need to keep a daily eye on how quickly money is coming in so you can spot potential problems early on.
Then you need to act on the information. For example, by selling off surplus stock or putting up prices to reflect rising costs.
[Extract from Trading Through The Economic Downturn - published by NatWest - full Guide available by clicking here]
http://www.ukba.co.uk
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