Making your business more efficient will save time and money. This is often taken to mean cutting costs but, while cutbacks can be a part of it, there are other routes you can take.
1. Business processes
Are all your business processes as streamlined as they could be? Are there examples of bottlenecks or duplication of effort? Talk to your staff, as the people doing the tasks regularly will probably have ideas for how they can be improved.
2. Cost-effective staff
Make sure you're getting the most from your staff. Do they all have the right skills they need to do their jobs? Are they motivated to do their best for your business? If they pick up on the possibility that the business might be failing, productivity may drop and valuable staff might leave. Bring them in on your plans early and ask for their feedback.
Sometimes you may have no choice but to consider reducing staffing costs, through reducing hours or making redundancies. Remember that making redundancy payments could increase costs in the short term, and may cause the remaining employees to feel insecure.
3. Reducing overheads
You can reduce overheads in other areas, like cutting back on advertising or purchases of new equipment. However, be wary of sacrificing long term investment for the sake of short term cost savings. For more information, see avoid insolvency.
You should also review your assets and consider whether any are surplus to requirements and can be sold to raise cash. This might include unused land or stocks.
You should consider reducing waste, write-offs and theft of stock. This is an area where most businesses can make significant gains in their gross margin percentage. See create a strategy to reduce business waste.
Theft is estimated to represent 1-2 per cent of a retail business' turnover - that represents a significant potential increase in the gross margin if it can be eliminated.
With those possible gains it is worth considering security measures - eg mirrors, CCTV, or more staff on duty at peak times. Better stock management can reduce write-offs from having to offer a discount on unsold goods or throwing out perishable stock after its sell by date.
Occasionally the situation may require more radical solutions - eg to avoid bankruptcy. If you need to restructure your debts, an Insolvency Practitioner can help you. For more information, see: