THE global financial crisis hit hard and fast.
THE global financial crisis hit hard and fast.
Although the warning signs were there, few economists and market analysts expected or could have predicted the impact the downturn would have on local businesses.
Many of the state's businesses have never experienced such a severe market reversal, leaving business owners scrambling for information and advice on whether to continue expansion plans or batten down the hatches.
William Singer, a client acquisition and management specialist at Expense Reduction Analysts, said complacency during an economic downturn could be detrimental to a profitable business.
He said those businesses which are proactive in taking action to cut costs were likely to overcome financial issues before they became unmanageable.
"Western Australian businesses believe what they like to see happening is in fact happening," Mr Singer said.
"The annual golf day, lunch with the supplier or insurance broker results in next year's contract or supply agreement.
"Slowly, this blind trust eventually grows into complacency, which is a serious hurdle in achieving healthy financial results.
"Cost-cutting is not exactly glamorous, however there are consultants available to help you and they will scrutinise the little costs like insurance, printing and freight, that add up to large savings."
Among Mr Singer's tips for businesses to cut costs were: the calling in of independent consultants to negotiate prices with suppliers (to allow the day-to-day relationship to remain unaffected); challenging any price increase by a supplier; monitoring and limiting the use of stationary; and reviewing luxury items, such as fuel cards.
He said businesses should also build good relationships with suppliers who might be willing to pass on savings down the supply chain, investigate insurance needs long before the renewal date to allow time to negotiate with brokers, and improve cash-flow by encouraging suppliers to hold on to stock on a consignment basis.
Corporate advisory and restructuring partner at PricewaterhouseCoopers, Derrick Vickers, said cost cutting should begin with non-core aspects of the business.
"Always be pragmatic and be prepared to make decisions that are tough but necessary for the business' survival," he said.
