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Medichecks CEO, Alun Hindle, discusses how to manage costs in a fast growing business
You can’t manage what you don’t measure so keeping a close check on spending is a must, especially as the business grows.
“Financial discipline includes timely reporting,” says Alun Hindle, CEO of Medichecks, which provides private blood tests online. “Too often, in the rush to build a business, there is no control over who can spend the company’s money and by the time the information filters up to management, it’s too late.”
As an online business, Medichecks allocates a sizable portion of its advertising budget to paid search fees. Hindle admits that in the past, a lack of experience and internal control led to its pay-per-click costs spiralling out of control.
A cost management strategy can also help a new business anticipate quiet times of the year and plan for them. For Medichecks, “December is not a good month for health-related spend,” Hindle says. “In the past, this has led to a squeeze on cash when the fixed costs of the business must be met at a time of revenue shortfall. It’s only a temporary issue, but it requires foresight.”
Getting expert advice on your cost management strategy is advisable, especially if the company founders lack a background in finance.
Medichecks uses a financial consultant who “produces detailed monthly accounts which, for a fast-growing business, often look out of date as soon as they have been produced, but at least we know how each area has performed against budget,” Hindle says. “This promotes discussion of costs and the effectiveness of any spending. We’re able to quickly identify when something isn’t working and shift resources to areas that will deliver a better return.”
The company has found value in using specialists in other areas too, for example to keep online advertising costs under control. “We now entrust this part of our budget to digital marketing experts, with strict limits and controls on what they can spend,” Hindle explains. “Identifying weaknesses in the business and formulating strategies to address them is a key part of cost management.”
You can read the full artice in The Guardian