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September 2009

Never stop cutting costs!


IN these times of recession with little prospect of an early recovery, most firms will by now have instituted stringent cost-saving initiatives — however, never stop looking.

Just recently, we undertook a review of all our insurance policies and I am ashamed to say that while we have frequently compared the market on car policies, only recently have we looked at our building insurance, business insurance, household policies etc.

The end result of this review has been a saving of thousands of pounds which encouraged me to look further. The next target was the firm's bankers.

I have been with the same bank since 1970. The service has never varied much between grim and very ordinary. However, in recent times, the standard of service has been virtually non-existent. This has not stopped the bank from introducing a whole new raft of changes, slipping in these in standard letter form presumably in the hope that customers will not look too closely.

Well, this time we did look closely and noted that not only had they increased our bank charges on virtually all items by an average of not less than five per cent and usually up to 10 per cent and more, they had also changed the charging date from quarterly to monthly. That will of course have a delightful effect on the bank's cash flow and will no doubt help to increase dramatically the turnround in their profits.

Queries to the bank had simply been ignored, apart from the occasional standard letter and as I am accustomed to getting zero service, I decided to look elsewhere.

Lo and behold, I have come accross a number of extremely attractive alternatives. The one I have chosen not only gives a useful six per cent on the first £2,500 invested, it also provides zero charges on all normal banking requirements.

No more monthly bank charges, no more account management fees and no more meaningless letters offering ever-increasing standards of service when in fact the opposite is usually the case.

The bit is now between the teeth and in the past few weeks, we have changed internet and telecom provider as well as gas and electricity providers and I am almost looking forward to my professional indemnity renewal which falls due in the next couple of months.

This hasn’t changed for some considerable period of time but my brokers will be under no illusion that if they wqant the busiess, they are going to have to cut their margins to the bone.

When one of our regular suppliers informed us with “much reluctance” that due to ever-increasing costs he had to increase our charges by eight per cent, we informed him that unless he reduced his costs by five per cent, we were off. Surprise, surprise, they agreed.

There is something almost therapeutic in these recession-hit times in seeing how successful cutting costs can be and most importantly, we have learned our lesson that this should never stop.

Just as you think you have done as much as you can, something else crops up and this morning I received my new credit card with a very attractive cashback offer on all purchases.

Chartered Surveyor,
High Street,
North Wales.