Small businesses have been warned to keep a close eye on their cash flow in the first quarter of 2010 as a substantial increase in running costs is expected.
The Business Inflation Guide (BIG) published by MORE TH>N BUSINESS, detailed an overall increase of 0.6% in business costs in Q3, 2009, following considerable increases the previous quarter, placing even more pressure on businesses who are already feeling the strain.
Fuel costs saw the biggest increase at a rate of 3.42%, hitting those in, or associated with, the transport sector hardest as the costs associated with vehicle tax, repair and maintenance also increased.
Furthermore, the manufacturing industry experienced an increase in costs of 0.63%, whilst costs in the service sector increased by 0.55%.
However, although general business costs have risen for the second consecutive quarter, they remain below the level of the previous year following deflation towards the end of 2008 and the beginning of 2009. Nevertheless, as costs look set to increase again for the first quarter of 2010, businesses should ensure they plan effectively to remain stable.
Whilst introducing a cost control system can bring immediate savings, it can also ensure the business remains competitive in the market.
There are many ways to manage costs when running a small business, including reducing payroll by outsourcing non-core activities such as the credit management function, to enable you to concentrate on your core business activities.