It is vital that as a small business owner, you strive to reduce your firm’s outgoings wherever possible. With this strategy, you can free up capital both to fund day-to-day operations. Turner Little discusses how to cut down five significant business costs.
Office space
There are various considerations for choosing office space, but one of the most prominent is budget. Office rental costs can be high, but there are various ways to reduce the burden they place on your finances. You could opt for a short-term lease, allowing you to move easily without incurring significant fees. Serviced offices are also cost effective, as they can be rented monthly and provide various utilities, helping you to trim outgoings in other areas.
Furthermore, you could take advantage of the UK’s ever-growing sharing economy, by opting for flexible or co-working office space. The majority of these spaces feature short leases, modern amenities and full utilities, like internet connectivity. You can even fit your space out with company branding or hire a single desk initially and then add or remove desks as needed. There are various online marketplaces for co-workspaces, like Hubble and We Work, making this option very viable.
Staffing costs
Taking on talented staff is key to business success, especially if you are just starting out, but your current budget may not allow you to hire many full time employees. Reduce your firm’s staffing costs by outsourcing certain tasks to freelancers and agencies. This tactic can also help you expand your firm’s operations quickly, by drawing on high-class industry expertise as and when you require it.
You can outsource various tasks, from sales and marketing to HR and accounting, allowing you to transform a fixed cost into a variable expense, which can be reduced to suit your financial situation. There are various online marketplaces to advertise for freelancers, including Upwork and People Hour, as well as specialist databases such as Journalism.co.uk, where you can find writers for hire. Read our guide to managing outsourced employees, to ensure you make the most of your investment.
Energy expenses
You can significantly cut down outgoings by managing and reducing your energy usage. You can implement a range of simple measures, such as ensuring devices are turned off, when not in use, which can really save energy. Other simple measures include installing energy efficient lightbulbs and controlling the office temperature via thermostat, to keep heating costs down.
Furthermore, you could also install a smart meter in your office, to manage your electricity usage. This could prove useful as according to the Carbon Trust, firms waste 20% of the energy they buy. Smart meters give you electricity usage information in real time, via a digital display or an online portal. It also sends the data to your provider, so you will not be overcharged. Check with your supplier, as smart meters are already being rolled out. Companies with under ten workers can be eligible to receive free smart meter installation from their energy provider.
Technology costs
In this increasingly digitised world, it is key to invest in technology, to connect with consumers online. However, software quickly becomes obsolete and hardware slows over time, imposing extra costs on your firm. Instead, turn to cloud computing technologies, where your firm’s vital information is stored via remote servers online. This eliminates the need for a server in your office and can lower your IT installation and administration expenses, as everything you need is available via the cloud.
We should note that cloud computing technologies can update your software and security, as well as back up any data you store in the cloud. This will allow you to reduce software costs and safeguard your business’ operations from cyber-attacks, which can prove expensive to address. Last year, Cloud Industry Forum found that 70% of British companies which use the cloud, decided to utilise these technologies to lower infrastructure costs, showing that it is an effective money saving technique.
Business banking
On average, British companies pay more than £2,500 on bank fees and charges every year, meaning that banking can be a considerable expense for your firm. But you can save money on business banking by switching providers. Contrast providers via price comparison sites like Money Supermarket. Look at factors such as bolt-on benefits, headline rates, bonuses, administration fees and additional charges, e.g. for surpassing your overdraft limit, to determine which bank provides value for money.
It is also wise to enlist expert aid, when switching banks, to ensure that your business’ money is being handled appropriately. As a registered bank intermediary, Turner Little can supply you with first-rate advice on UK business banking. Working with our contacts at the senior management level of British banking, we will find the best provider for your circumstances, helping you trim your firm’s outgoings.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
