If you’re a small business owner, you’ll know that keeping a keen eye on your spending is crucial to your business’s growth. Working out where you’re overspending can sometimes be a bit of a mission but giving your business back some cash can make it well worth your time. If you’re not sure where to start, here are some ways in which you might be able to cut back on costs and reinvigorate your cashflow.
Review your communications bills
Communication is a key part of any small business. Broadband and phone bills can be some of the most costly recurring bills around and can often increase steadily each year. If you haven’t reviewed your providers in a while, it never hurts to shop around and see what deals are on offer. As well as getting a better service, you might end up taking a chunk out of your monthly outgoings.
Reassess your workplace
The events of the past few months may well have prompted you to think carefully about your workspace. If you don’t rely on specific premises for your business, you might want to review your current workplace setup to see if you can make a saving. If you do rent office space or pay to use a co-working space, you might want to try shopping around for a less expensive alternative or even thinking carefully about whether you need a rented office at all.
If you work from home, your workplace costs are probably already fairly low but it’s still worth having a look to see where you could cut costs. Is your energy supplier giving you the best deal, for example? Have you made sure that you’re claiming back all the expenses that you could be? Workplace expenses can really add up, so it’s well worth having a thorough investigation in this area.
Create a budget (and stick to it)
It might not be the quickest way to pinch the pennies, but if you don’t already have one, creating a budget is a very powerful savings tool for a small business. As well as gathering together your average monthly income, you’ll need to make a note of your fixed costs and any variable expenses too. There’s obviously a bit more to creating a budget than this but these are the essential building blocks. Once you’re up and running, you’ll have insight into where your money is going and will be able to spot opportunities for cutting back on costs.
Don’t be afraid to ask for discounts
If you’re not used to doing it, asking for a discount can feel a bit daunting. Although it’s not something you can do with every one of your outgoings, it can be a great way of cutting back on certain costs. For example, a caterer might discover that they are paying more for their supplies than they would pay from their supplier’s competitor and could ask their current supplier to match the lower price. However and whenever you go about asking for a discount remember there’s no harm in asking and be mindful of your supplier’s own business costs.
Although it can be tempting to buy shiny, new equipment when your business needs some, you’re often missing a trick by not buying second-hand. If you’re in the market for something like office furniture, for example, it’s often a good idea to head to your local second-hand furniture store or an online marketplace like Gumtree. As well as getting a great bargain, you may find a piece that’s more valuable than an item from a standard shop. Reconditioned IT equipment can also be a great way to make substantial savings and often comes with warranties just like new equipment. Just make sure you buy from a reputable supplier. It’s also worth making sure that you’re not cutting costs in the wrong places. Printing your own business cards at home with low-quality paper, for example, could potentially end up looking unprofessional and devaluing your brand.
Talk to an accountant
If you don’t already have an accountant, you might not be aware that one of the ways they can help a small business is identifying areas that they could save money. As well as having an expert understanding of the UK tax system, and being able to advise on the best way for you to be managing your finances in a broader sense, they can also spot trends and problem areas and save you money in the long term. Although it might be a case of spending money to make money, an accountant’s expertise could end up being priceless in the long-run.
If you’d like to get a clearer overview of your business’s expenses, cash flow and profitability, try out a 30-day free trial of FreeAgent’s award-winning online accounting software.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.