Consumers are happy to see the price at the pump so low, but as an oilfield service company, not much can be worse. According to The New York Times, oil is in its deepest downturn since the 1990s, if not earlier. At of the end of January 2016, an estimated 250,000 oilfield service company employees lost their jobs as oil prices fell.
As any business does, an oilfield service company has many expenses. It is important to review them all – even the small ones. Although you think they might not matter to your overall budget, everything can add up for your oilfield service company. When times are tough, eliminating the small expenses can save your company money and help you survive the downturn in oil prices.
Some expenses can’t be eliminated as these are crucial for your oilfield service company. However, there might be a more cost-effective and cheaper option than your current solution.
Are there other areas you can branch into if you’re not finding enough work in the oilfield? Just because you’re an oilfield service company, it doesn’t mean that it is the only thing you can offer. Get creative – use some resources and the people you have to find new work.
Advertising can be a big investment for an oilfield service company, or any company in general. If possible, partner up with another business and split the advertising cost.
As an oilfield service company, many of your customers pay 30, 60 or even 90-plus days from the date of invoice. Having consistent cash flow is an important aspect of keeping your company afloat. With creative solutions like invoice factoring, you can get paid on your invoices the same-day.
People negotiate all the time with your oilfield service company, so there is no reason you can’t do it as well. Always see if there is deal or discount you can get from your vendors.
Do you need new equipment for your company? If money is tight, it may be more beneficial for you to lease your oilfield service company equipment rather than purchasing it.
Not only is it good for the environment, but by eliminating paper, you can save money as well as time and labor.
If your oilfield service company has been around for several years, you probably have some main customers that you depend on. Venture out and look for new work in new places for your oilfield service company. Start with networking at events or trade shows. It can lead to some new opportunities or spark some new ideas for your oilfield service company.
With oil prices being low, an oilfield service company has to find creative ways to save money and maintain a steady cash flow to survive. If you need assistance in growing and maintaining your oilfield service company and its cash flow, contact the financial experts at TCI about the factoring services we offer.