Efficiencies now will make your firm stronger in the long run
2nd Apr 2020
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Finding savings now will make your firm stronger in the long run
In testing times, a strong Chancellor is the best any country can ask for.
Having come into office in February after the shock resignation of Sajid Javid, Chancellor Rishi Sunak was a youthful unknown.
Delivering his first Budget on 11 March, just 27 days into the job, he impressed observers with his confidence and decisive action to support businesses that were just beginning to feel the bite of the coronavirus outbreak.
Since then, he’s delivered two further rounds of announcements, each more comprehensive and generous than the last, culminating in a colossal package of business support measures announced on 20 March.
He is doing the right thing. At this time, we need steps to be taken that will cushion the economy from shocks and jolts. It’s in the national interest to protect jobs and help SMEs stay afloat even if they can’t trade for the time being.
At the same time, we’re businesspeople and we can’t help but be aware that this period of debt leveraging has implications for the future. It’s not free money.
Don’t kick the can down the road. Don’t hope the Chancellor will continue to provide forever.
At some point, not only will the fiscal taps be turned off but the Treasury will also look to claw as much back as possible in the form of taxes. This year’s Autumn Budget could have a real sting in the tail.
Even if that seems a remote concern right now when you and your clients are in survival mode, staying on top of your expenditure and seeking long-term efficiencies is always worthwhile.
One key metric to consider is cost per client (CPC). Every small improvement to your systems and processes drives this number down, increasing both your profit and your capacity to take on more work.
In particular, look at how you can reduce the amount you spend servicing smaller clients while still providing them with good value for money. Aim to bring your tech stack cost lower than 5% of the revenue garnered from the Client, leaving you enough to support the rest of your business at this crucial time.
If they’re not paying for a tailored service, and don’t expect it, there’s no reason not to aim to make your processes and products repeatable and scalable.
Use software to reduce the points of friction (paper records, human error) and to provide as much flexibility as possible. For example, if your clients’ records are stored in the cloud using Capium, you can easily bring on temporary staff at peak times.
They could even work remotely – the unique selling point of cloud software – taking advantage of our unlimited staff user licences.
As long as you’re clear about what’s included in the fee and stick to it, everybody wins.
Indeed, for many clients, this will be a dream – some just want their tax returns or other compliance needs handled quickly and neatly.
Space for ambition
Once you’ve got the delivery of services to lower-value clients running on a production line, you’ll have more capacity to focus on those with more complex needs.
If they cost more to service, that’s fine, as long as they’re also willing to pay for tailored service.