With many businesses expecting a lower profit this financial year, the more prepared you can be for the unexpected, the better. Managing expenses is a good idea at any stage in your business and you can also consider increasing your prices to improve your margins.

Smart Ways to Get Your Costs Under Control

Cash flow has been a significant issue for thousands of businesses this year, and when the money’s not rolling in, it helps to rethink your costs. Effective cost control goes beyond just watching your outgoings—it’s about examining all parts of your business to see if your systems (or lack of systems) are causing unnecessary expenses.

Here’s how:

• Muck in
  Conduct a cost control audit to identify your major cost centres. Evaluate your systems for managing these areas and see where improvements can be made.
• Be aware
  Avoid blindly cutting costs without considering the impact. Continuously track expenses and seek opportunities to trim costs while maintaining efficiency and outcomes.
• Unite your team
  Involve your entire team in monitoring and analysing inputs and expenses. If you’re reviewing or developing your systems, ask for their insights and suggestions—they often have valuable, on-the-ground perspectives.
• Look to your peers
  Compare your costs with similar businesses. If a company of a similar size and production system is performing well but spending less, take note of their practices and explore how you can implement similar strategies.
• Seek advice
  Whether you have a good understanding of where the issues lie or are feeling completely lost, talk to your advisors. Get expert input on your next steps and strategies for cost control.

How Can I Put My Prices Up Without Losing Customers?

If you need to increase your pricing to improve your margins, transparency and communication are key.

• Be upfront online
  Clearly update your website and social media to reflect the new prices and explain the reasons for the change.
• Communicate via email
  Send an email to your clients and suppliers informing them about the price changes. Provide details about why the adjustments are necessary.
• Face-to-face interactions
  Ensure that your customers are aware of any price hikes before invoicing. Nobody likes a surprise, and many countries and regions have consumer protection laws against unfair trading practices.
• Train your staff
  Provide your team with the necessary information to communicate price changes confidently and professionally. Keeping your staff updated ensures a consistent and positive customer experience.
• Stagger price increases
  Concerned about losing customers? Consider incrementally increasing the prices of individual products over time rather than doing it all at once.

Get in touch if you’d like us to help with an analysis of your margins and expenses. We can provide tailored insights and recommendations to help your business stay strong and profitable.