1. Take a fresh look at your business
It’s a good time to review your business expenses and look for opportunities to save, especially on the fixed overheads your business pays every month. Start by reviewing your incoming and outgoing cash flow with Business cash flow view1 in the CommBank app to identify the areas where you are spending the most, then work your way down the list from the highest costs to the smallest. Here are some of the ways you may be able to save:
- Check you’re getting the best deal on basics such as your phone and internet, energy and insurance. CommBank has partner offers with providers such as Amber for electricity, and More for internet and phone. Switching providers can be an easy way to save money.
- If you’re one of the many businesses whose staff are now working partly from home, consider whether you can move to a smaller, less expensive office with shared desk space.
- Look for opportunities to outsource activities that can be done at lower cost by outside providers so your staff can focus on your core business.
- Discover Daily IQ for tailored insights about your business and learn about new growth areas with geographical sales and customer spending trends data.2
2. Review your pricing and margins
Increasing your prices is the quickest and easiest way to improve your margins and profitability, with every extra dollar going straight to your bottom line. Your customers may be more willing to accept price adjustments with costs rising across the economy than when inflation was low. Here’s how:
- Calculate the gross profit margin for each of your products or services.
- Consider how you can increase the profitability of low-margin activities or focus exclusively on higher-margin products and services.
- Consider whether you can increase prices for particular products, services or customers, or create higher-priced variations of your existing range.
- If your costs are increasing, ensure your prices rise proportionally so you can maintain or improve margins.
3. Create a working capital buffer
Having extra working capital on tap is a great way to protect your business from unexpected expenses and cost increases, so you can continue to pay the bills while you adjust. Here are some options to consider:
- If you have a variable rate BetterBusiness Loan you can use any spare cash to make extra repayments on your loan, reducing your interest costs, then redraw funds when you need them.
- A Business Overdraft can help you access funds instantly when you need them, then repay them at your own pace, while only paying interest on the amount you use.
- Stream Working Capital can help you unlock the value of unpaid invoices by borrowing against them, then repaying the funds when you get paid.
4. Get a business health check
For expert advice tailored to your unique business situation, contact your local Business Banking Specialist for a business financial health check. It’s quick, confidential and free.