93% of the total business population is made up of small businesses. SMEs are a vital part of our economy, and many operate with just one employee or a very small team. The average cost of starting a small business is between £5,000 and 20,000 and many start-ups underestimate the financial burden and subsequently fail. That’s why to build a successful small business, you need to plan, work efficiently and cut expenditure wherever you can. Check out these small business savings tips to help you reduce costs and save time.
Try remote or flexible working
A few years ago, it was only very few businesses that offered remote or hybrid working. But since the pandemic, with thousands of businesses opting for remote working and sending their staff home, it’s the norm. And it can actually be a really helpful way to cut costs when you’re a small business or just starting out. Although an office might act as a business hub, where colleagues can meet and collaborate, nowadays many employees enjoy working from the comfort of their home and are actively seeking out more flexible options. Deciding to go fully remote and giving up your professional premises means you no longer have to pay rent or a mortgage and can dramatically reduce your overheads and bills. Now more than ever, people value their leisure time. If you do have staff, you can also find out if they would be interested in working part-time, reduced hours or even a four-day week to increase productivity, free up some of their time and save you money.
Use fuel cards
It’s a great idea to use fuel cards for small business if you or your employees travel regularly. Choose a free fuel card option that doesn’t have hidden fees or surcharges to make sure you don’t end up with additional bills. Fuel cards allow you to save money on petrol per litre and if they come with an app or an online account it’s much easier to monitor your expenditure and fuel consumption. Once you know how much you’re spending on petrol, you can assess whether you need to make changes to the vehicles you use or the fuel type they require to ensure you have the most economical option and are keeping costs down. When you have a business account and use it in combination with a fuel card, it’s also a lot easier to claim back VAT which is a significant financial boost for your business.
Outsource to specialists
When you’re a small team or a one-person business, there are definitely going to be things you can’t do. However, not all jobs need to be done by in-house staff. Sometimes it’s necessary to hire a full or part-time employee to conduct tasks that are outside your capabilities but more often than not, outsourcing to another business or freelancer may be a better option financially. Paying a full salary is incredibly expensive and the hiring process is often lengthy, requiring a considerable amount of effort, time and money. Outsourcing is a great option because you save the cost of hiring, you don’t have to pay for a new employee’s training, and you get high-class expertise in return. You should only hire permanent staff when you are sure that you need to, and your budget will account for it.
Have shorter meetings
When you’re a small business, time is precious, and every moment spent working really counts. Meetings are an essential everyday part of business whether that’s internal catch-ups, brainstorming sessions within teams or external meetings with clients and partners. However, sometimes business founders, directors and staff get caught up in meeting after meeting which means they are left with very little time to complete work. More time spent working means more time driving sales or profit. So cutting down the time spent in meetings and giving them a clearer focus will save money in the long run. Make sure a meeting is really necessary before setting it up and try to set a clear schedule with a desired goal and defined objectives - so you don’t waste time.
Review your expenses and buy in bulk
Costs can quickly mount up when you run your own business. Even if it seems like you’ve got a good idea of what you need and what you’re spending money on – it’s always good to audit and review your expenses. Take a look at what you’re spending across the business from your largest costs to your smallest ones. If you’re keeping track then it’s unlikely that you’ll come across an obvious way to save a significant amount of money but just making small changes can make a big difference. Once you’ve done that, you can see if there are cheaper alternatives whether that’s for everyday basics, big budget items or outsourced specialists. Buying in bulk is another vital way to save money which also benefits the environment by reducing travel miles and packaging. Most things can be bought in bulk such as stationary, technical equipment, furniture and food or drink for you and your employees.
Resources:
Business Fuel Card - Oregon State University