January and February present a perfect opportunity to set new-year short- and long-term goals for your business. In particular, now is a great time for planning on how to deal with rising costs and declining liquidity.
A recent report by the Reserve Bank of Australia found that small businesses are experiencing a barrier to growth due to their inability to access further finance. Comparative ease of access for finance has declined, and this directly effects liquidity.
Banks are increasingly reluctant to finance start-ups and younger companies, given the high risks. As a result, small businesses are resorting to alternative working capital including high interest finance such as personal credit cards and third and fourth level financiers. Underpinning this reluctance of the banks, property security requirements in a falling property market makes working capital even harder to find.
But in truth, businesses need availability to cash now in order to retain profitability.
So, how can business reduce their demand for cash and working capital? In other words, how can they tune their businesses so they don’t need to access cash from the banks – who are reluctant to give them money anyway.
In the face of difficulties to access finance, businesses are learning about a very efficient solution to drive profitability to their bottom line through offshore outsourcing.
It works like this – a business relocates part or all of its administrative workforce to a location that has lower costs in terms of manpower and logistics. This could be within Australia, or overseas. A perfect example is the Philippines where hundreds of Australian SME’s are relocating their accounting, administration, IT and customer services functions to a highly educated and agile workforce with savings often in the vicinity of 55%-65% on cost.
This equates to more than $30,000 per employee per year ….. straight to the bottom line!
Offshoring capability is afforded through technological innovations such as readily available remote administration software for processes including payroll, accounting, and project management. In addition, cloud-based computing and web-based programming software allows teams to support Australian businesses from thousands of kilometres away.
Many of Australia’s largest companies use this as a cost reduction strategy by relocating to regional locations within Australia, and expanding operations to overseas to English-speaking countries with companies like Profitmaster in the Philippines.
This, coupled with the fact that it’s incredibly easy to set up a team, is why workforce relocation is an attractive alternative to generate higher profits without debt.
Profitmaster offers you an incredibly easy way to outsource your administration workforce in 2019, allowing you to bring down cost without affecting revenue. With Profitmaster, our clients create a seamless work environment with significantly reduced overhead.
They count on our experienced staff to do the work that needs to be done.
As a full-service provider, we offer an easier and innovative way to drive your business expansion through lower cost.