With the economy the way it is, cutting costs as a small business can be a lifesaver. If you’re looking at your quarterly bills and feel like burying your head in the sand, you need to do something about it. As a small business, every penny counts – whether you’re in an office or a shop environment, it’s essential to get in control of your finances and cut back wherever you can. The sooner you do that, the sooner you can reap the rewards of all your hard work rather than dipping into your profits to pay unnecessary overheads.
According to research by Clydesdale and Yorkshire banks, it was found that over 50% of small businesses go for 6 months without reviewing their expenses, while 14% never reviewed their costs and spending habits. While you may be one of the businesses who do evaluate their spending habits regularly, these statistics just emphasise the importance of not being blasé about what you’re spending on – outgoings need to be reviewed frequently so that you can see exactly where your cashflow is going and what spends can be limited to mean more money in your pocket.
Other than staffing costs, it was found that the five top business expenses are:
- Materials and supplies
- Rent and rates
- Vehicle fuel
- IT tech and support
Combine these five expenses together and in most cases, what you pay out will equal over 50% of the total business expenditure – you need to see where you can cut back to see a healthier bank balance.
Staff alone are an expensive commodity and you should always make sure that you don’t hire new employees just for the sake of it. If each employee you have doesn’t have specific responsibilities, or you can manage without, don’t hire more! While they will inevitably lighten your workload, salaries will be a huge drain on your business cashflow.
It has also been found that nearly 50% of business electricity and gas use happens outside the conventional working hours. Perhaps equipment, lights and heating are left on when the door closes – you need to get on top of this as soon as possible.
Take a look at these top 5 ways of cutting costs and see whether any are relevant to you:
- Go green! Make sure your premises are well insulated so that you’re not wasting money on heating. Turn the thermostat down and turn off appliances before you leave. Use timers on radiators etc. so that they’re not heating the premises when you’re not there.
- Print double-sided (or avoid printing at all!). This doesn’t cost a penny, saves you on paper, ink and electricity and is also kind to the environment.
- Skype instead of travelling. If you need to meet and liaise, do so over Skype rather than spending unnecessarily on fuel and adding to the carbon footprint.
- Reduce the money you spend on marketing by utilising social media to the max.
- Switch energy providers! Don’t let your energy contracts roll over without reviewing them and make sure you’re on the right tariff for your usage.
This article was written on behalf of British Gas. Do you need a new business gas supplier? Whether you want to see how to switch business gas suppliers or you’re interested in finding out more about energy efficiency in the work environment, the British Gas website has plenty of resources that can help.