COST MANAGEMENT STRATEGIES FOR SMALL BUSINESSES

Jessica Nwuzi
13.04.2019

Cost management in business as the word implies, is the process of controlling the resources available to run a business.

The amount of money that a business utilizes to function progressively should be monitored and well-managed. A good budget is always needed. This will not only help to curb extravagant expenditure and encourage prudent spending, it will also ensure profit increase.

The image above is a helpful approach to ensuring that proper management of costs in a business.

It is important to plan, analyse and track cost, and make informed decisions on purchases and expenditure. Here are 10 effective strategies for managing cost for small businesses.

  1. Plan ahead
  2. Make up a reasonable and detailed budget.
  3. Cut down on overhead and running costs e.g rent, electricity, transport, telephone bills, etc. Define the fixed and variable costs.
  4. Utilise online tools and software.
  5. Advise and train members of staff to be economical in the use of resources.
  6. Hire to fill relevant roles, and outsource tasks that are one-off.
  7. Take inventory frequently, and track expenses.
  8. Review costs and expenditure regularly, and minimise where you can.
  9. Seek out different suppliers and manufacturers of goods, and compare prices before purchasing.
  10. Plan for contingencies.

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25.02.2019

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26.02.2019

Human resources are like the heartbeat of a business....

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27.02.2019

A good record of accounts and cash flow are important...

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