It’s super easy to get ahead of ourselves when running a business. You buy one thing for the office here, sign up for a couple of subscriptions there, and before you know it, your outgoings end up reducing you to tears.
It happens to the best of us, but the good news is there are often ways to reduce costs. We have some tips to help you snip any unnecessary spending in your business faster than you can say Edward Scissor Hands.
Check your finance reports
Regularly reviewing your financial reports is like a full MOT for your business. You can see the condition the business is in, highlight any issues, and identify your most valuable assets and resources. Looking at your business under the microscope will help you to both understand your business more and make effective cost cuts.
Fortunately, creating financial reports can be much less complicated than you may think, particularly if you use bookkeeping software. This can help you:
- Stay up to date with what’s what: Know exactly what your income and outgoings look like and identify any hidden costs such as forgotten subscriptions.
- Plan for your future growth: You’ll be able to spot trends and set realistic targets based on the data you have.
- Make better business decisions: Over time, you’ll be able to make more effective decisions. Good data leaves less room for guesswork!
- Delve deeper into your finances: Get to know your finances like never before. Understand which clients pay on time and identify any late payers who disrupt your cash flow. You can also manage your costs, for example, by monitoring specific purchases or tracking your energy bills.
Look at your energy costs
Is there anything your supplier can do to help trim down your energy bills?
Not a lot of people know that energy companies actually offer businesses grants and schemes to help reduce bills by making you more energy efficient. Have a chat with yours to see what they offer and if they don’t provide any help or give you advice – look elsewhere! Check out Ofgem for more details.
Can the government help with my energy bills?
If you’re a non-domestic customer (which is basically anyone using energy for their business, charity, or in the public sector) you may have been enrolled on the Energy Bill Relief Scheme. This does come to an end in March 2023, but a new Energy Bills Discount Scheme (EBDS) has been announced.
Eligible non-domestic customers in Great Britain and Northern Ireland will receive a discount starting from April 2023 until April 2024. There’s no need to apply to this scheme, and the discount should be taken off your bill automatically each month. If you think you should receive a discount on your energy bill and don’t – contact your supplier!
Don’t be afraid to haggle to reduce your costs
We’ve all haggled at some point in our lives, whether we’re trying to get a better phone deal, or make an offer on a property. The people who do it best, are always the jammy ones with the best deals.
If you’ve been with a particular supplier for a while, whether that’s your energy supplier or your accountant, if you don’t feel like you’re getting the best deal possible, have a chat with them. Nothing is more valuable than loyal customers, so get your haggle on at once – that is an order. Remember: If you don’t ask, you don’t get!
Check your subscriptions
It is unbelievably easy to take on a bunch of subscriptions that cost a few pounds a month here and there, but before you know it, you’ve racked up hundreds of pounds a month on stuff you no longer use.
Do you still need the three different types of photo-editing software you signed up for last year? Letting this sort of thing pile up can really drain your profits. Ask yourself:
- Is this still beneficial to my business?
- Are there any free alternatives?
- Can I find one subscription that does all (or most) of what I’m getting out of the subscriptions I currently have?
There are almost always free alternatives to take a look at, or software that gives you multiple features in one, so you can keep on top of what’s what.
And remember, some software charges you per user, so if someone leaves or changes their role, make sure to remove them or give access to another member of staff.
We’re using subscriptions as an example, but it’s good practice to really scrutinise each transaction going out of your business. Some of your spending might be there simply out of habit.
Allow remote working
If you employ staff, is it worth considering offering them flexible working? Home working = less energy used in your workspace = money saved.
We get that working together in an office can be much better for collaboration, but letting your employees work just one day per week from home could make a big difference to your energy bills.
It also gives your employees more flexibility, which many studies have said makes them happy and more productive!
You might even decide to ditch the office space altogether, although we get that it’s not a suitable suggestion for every business.
Sometimes you’ll have bits and bobs that need doing, like a particular project or something you need ongoing support with, but is it enough work to justify hiring a full time, permanent employee?
Outsourcing to a freelancer means you pay solely for the work/projects you need, which cuts down your costs, and you won’t need to think about the extra expense of making employer’s pension and National Insurance contributions either.
You can find freelancers with various levels of experience for a price that suits your business.
Get practical advice
If you’re really stuck on where to cut costs, speak with your accountant. They’ll take an expert look at your finances, and usually advise you on where you can save money, be more efficient, or claim tax relief to ease your bills.
Find more tips and advice for your business on our website, or tap into our guide on hiring the right accountant.