The Reserve Bank has kept interest rates steady in response to the continuing economic uncertainty.  Despite interest rates being reasonably low when compared to the last few years small businesses are still exposed to significant financial risk, especially if they are not constantly looking at ways to reduce costs.

Small local businesses could be in danger of going broke if they don’t keep their eye on costs, cautioned GiffardSim Accountants principal Rob Giffard in Nowra. Even though interest rates are low when compared to two years ago, other costs still need to be managed in order to maximise cashflow in the current economic climate.   

“Big businesses are generally good at managing costs; they often have accounting departments and relevant systems in place. Small businesses, however, such as food manufacturers and retailers, can find it a struggle,” Mr Giffard said. Small business owners rarely take the time to review their expenses 'line by line' and look for opportunities to improve their position.  This is often the result of time pressure, supplier familiarity, as well as general lack of knowledge or confidence when sourcing supplies or services.   

Mr Giffard said it is an issue especially related to country retailers. “They often personally know a lot of people, and their business has a relationship focus so they don’t want to disappoint suppliers by suggesting that they can get the exactly the same outcome from another supplier,” he said. To stay viable though, Mr Giffard said, small businesses needed to look at more effective ways of bringing costs down.

If you are a small or medium business owner and you would like to see whether you can effectively maintain or improve your profit margin please contact one of our experienced and highly trained accountants at South Coast firm GiffardSim Accountants on 4421 4355.