Small and medium-sized enterprises (SMEs) are part of every country’s business fabric. Their market entry, endurance and progress are crucial for creating jobs and wealth everywhere. Below we give cost saving tips for SMEs to keep thriving.
What do SMEs do?
SMEs have a small number of employees as well as moderate business turnover. We only need to look out of the window to see dozens of them: the bakery on the corner, our regular hairdressing salon and the engineering company remodelling our city centre.
When determining what an SME is, we must take into account the number of employees, annual turnover and balance sheet, as well as the amount of external resources available like properties and vehicles.
These companies are vital to local, national and regional economies. According to the Organisation for Economic Co-operation and Development (OECD), 99.5% of enterprises in Latin America and the Caribbean are SMEs.
This highlights the importance of SMEs’ financial health, since they are a key part of economic activity in countries and regions. They are a vast number of pieces that, when combined, account for most of the employment and social capacity of particular areas. As the International Labour Organization (ILO) underlines, they have the greatest power to create jobs and must therefore be managed properly.
Tips for managing SMEs: How to save on costs?
The financial management of SMEs bears similarities with running a household. Below are recommendations for cost savings in SMEs:
To learn more about how to save for start-ups, visit the Santander Chile Sano de Lucas website. For further advice on SMEs, check out Santander Bank, NA's Business First website. If you want to take control of your company's cash flow, this template drawn up by Finanzas para mortales will help you prepare your SME's cash budget.