PES Blog: Cost control could unlock your companies’ inner investment potential
Many businesses are finding that their current growth ambitions are inhibited by a lack of access to investment at the same time that business costs are on the increase.
In a recent questionnaire from the Forum of Private Business 2014, 63% of respondents reported that rising costs saw their growth ambitions stutter with 69% seeing business costs increase significantly in the last year. When this is compared to a similar number identifying problems securing investment as a barrier to growth the answer seems to be found in potentially a lack of investment.
Investment can come in two forms – money and time, both of which all businesses would like more of. Investment in the form of lending and the debate as to when this will return is dependent upon a variety of factors that are too lengthy to discuss here.
The investment in time is more relevant and quick to action. Most businesses that we speak to will often refer to the paucity of time being the main reason why deadlines are missed, targets not reached, performance being reviewed and so on. Life and business seems to be moving at a faster and faster pace. If you are standing still then you are being left behind is an old saying that has never been more apt in today’s business world.
How can a business get back time without creating a 25th hour or an eight day in the working week? Again we return to the management buzz words “delegation” and “resourcing”. Looking at delegation we find that most businesses are still reluctant to delegate tasks to team members who are equally as busy and time poor. Ultimately looking at costs requires insight and knowledge of not only the organisation but also the cost market that operates in the industry. The burden of this responsibility in getting the best deal or most appropriate contract can alter a company’s longevity, profitability and ultimately its survival for a time long after that employee may have left.
What about resourcing? Employing a new team member to free up time is a heavy cost consideration in itself. Will there be enough work to justify a new employee? Will the spare time be meaningfully occupied to increase the performance of the company? Will they be the right fit for the team?
Increasingly companies are recognising that outsourcing cost control benefits the performance of the company. By choosing the right consultancy cost management is undertaken on the company’s behalf when it is needed and in a timely manner. Expertise and knowledge of the market is brought to bear on the relevant costs. The added advantage of this strategy is that due to their buying power they can access rates not on offer to the open market.
Most professional consultancies trade across a variety of industries and can additionally offer thoughts and advise on best practices helping companies trade more effectively. Interestingly investment in cost control management expertise can sometimes give the company that extra cash flow to provide the investment it needs to grow by reducing costs that were considered previously acceptable.
So investment doesn’t always have to be going to the lending sources when the answer may be within the business now. And by delegating such cost control management activities you may be able to unlock this inner investment potential.
If you would like to find out more or just call for a chat about how your business can benefit, contact Remember the cost review is without obligation and can increase your profit with little effort on your part.
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