Small business overheads ‘not lean enough’
Time-poor firms could find better deals, says Doug Richard
Nearly half of Britain’s small business owners believe they could cut costs if they had more time to find and negotiate the best deals.
According to research by business saving advisor Make It Cheaper, small firms on average dedicate less than two and a half hours a week to cost management… with 28% spending less than an hour a week examining overheads.
This is despite two thirds of 750 business owners polled describing their cost base as ‘lean.’
Of those who responded to the researchers, 41% claimed they didn’t have enough time to shop around for good deals and over a third did not regularly switch business suppliers.
Furthermore, almost half (49%) have lost track of their energy contract renewal period, with 61% of business owners conceding that they find it easier to focus on selling their own goods or services than trying to reduce their outgoings.
The findings suggest that many small business owners are shopping like public consumers and failing to take advantage of the bulk buying opportunities and specialist service contracts available to businesses.
Indeed, the study revealed that 60% of small businesses tend to buy business essentials … including stationery, office equipment and IT software … through expensive retail channels and less than half negotiate discounts for buying materials in bulk.
Instead, in the case of 53% of respondents, purchasing decisions are made based on instinct or experience, with only 47% doing any research before making a purchase.
Consequently, former Dragon and serial entrepreneur Doug Richard has teamed up with Make It Cheaper to launch Business Fit, an online ‘business gym’ for small firms. He said:
“With overheads rising considerably over the last six years, small business owners may be surprised at how much weight can be shifted from their cost base by investing some time in taking control of costs and looking for the best deal.”
Jonathan Elliott, managing director of Make It Cheaper, added: “Whilst driving sales is the bread and butter of any business, it is important to avoid falling into uncommercial behaviours that directly impact profitability. Every pound saved is a pound of profit made … without having to go looking for extra revenue … so now is the time for small businesses to go on a cost diet.”