Published In:
The Australian Date Published:
15th July 2003 Author:
Marty Switzer
SMALL businesses are paying far too much for their basic services
such as phone calls, couriers, internet and stationery, and experts
believe that attacking these non-core costs can enhance profitability.
"The busy firm now makes more telephone calls, gets more printing
done, uses more stationery around the office, consumes more electricity
and generates more freight or courier traffic,'' said Steve Farrelly,
an associate with Expense Reduction Analysts (ERA).
"In my opinion, a lot of costs inevitably overrun across the board
during periods of strong or sustained growth.
"Everybody gets so busy ordering, selling and delivering that they
leave their old deals untouched.''
Mr Farrelly also believes businesses in the manufacturing industry
can make big savings in waste management, plant spare parts and
hardware, maintenance contracts, freight, electricity, insurance
and casual labour hire costs.
Michael Smith, group marketing manager for small business at Optus,
said most small businesses were time poor and carried unnecessarily
high costs as a result.
"Most businesses are so busy doing their own job that they don't
have time to look for a better deal,'' he said. "If I'm running
a small business I'm not going to spend a day a month checking my
mobile phone bill.
"The question is about getting someone to look at your total telecommunication
bill and there are people and websites that can help.''
Savings were there for those who wanted them, Mr Smith said. ``Basically
you need to have a sniff around.''
Gary Tocknell, an administration manager for 7-Eleven, said the
group was able to reduce its total courier bill by about $90,000
by employing the services of a cost reduction expert.
"We were having problems with our courier service and we needed
to see if someone could do it better for us,'' he said.
"We needed someone who could have a good look at the way we do business
and find ways for us to reduce our costs.''
Kylie Moss from Long Jetty Furniture removals in NSW said that her
family company was able to reduce its costs through employing the
services of a cost reduction expert.
"We brought our merchant charges down considerably,'' she said.
Charges imposed on credit card and eftpos transactions had been
cut from 3 per cent to 1.95 per cent, she said.
Mrs Moss said the company was far too busy to consider doing its
own chase for savings.
Sue Prestney, a spokesperson for the Institute of Chartered Accountants,
said some small to medium size enterprises (SMEs) took their eyes
off their costs due to a lack of time.
"I believe there is an element of wastage due to the inability to
find time to seek out options,'' she said. "There is no doubt that
there are costs that could be optimised.''
