It takes a lot of effort to generate money in business, but it’s all too easy to spend it again. From saving money on utilities to outsourcing there’s much that can be done to trim costs and ensure those outgoings don’t swallow up all of the hard-earned cash that you make.
By checking what you’re paying for telephone, Internet, lighting, heating and mobile phone contracts you could make worthwhile savings. Many people do this at home, but it is equally vital for a business too.
Checking costs on comparison sites is relatively quick and can soon reveal some home truths about where savings could be made.
Hand in hand with this is saving power; the Carbon Trust found in a recent survey that businesses generally could save some £300 million per year by implementing some basic energy saving steps.
The issue might be in motivating staff to do their bit to help conserve power at work, but little things like fully shutting down computers and other equipment when not in use and only heating and lighting occupied work areas can make significant savings and improve your carbon footprint.
Before recruiting new staff consider if the work you need to be completed could be outsourced. Even if certain types of work are constantly required, it may be preferable to use outside contractors such as freelancers rather than increasing your overheads by recruiting a permanent member of staff.
It depends on the type of work and role of course, but it could be worth considering.
3. Audit suppliers
It does no harm from time to time to check rates from your regular suppliers. In some cases you may prefer to spend a little extra knowing you can rely on a certain supplier but, still, it’s worth checking you’re not paying over the odds on things like stationery, bottled water for the drinks machine etc.
4. Check expenses
Everyday expenditure doesn’t have to grow and grow – there are always ways to trim these down.
For example, a managing director of one UK company was able to reduce the monthly postage bill by nearly two thirds by sending items as large letters as opposed to packets. By simply redesigning the packaging to fit the Post Office’s letter stipulations they saved some £1,700 per month.
So review those expenses and, if something jumps out that seems a bit exorbitant, there’s a reasonable chance something could and should be done about it.
5. Saving tax
You may need the help of your accountant here. Perhaps one has already suggested ways to save money under this heading that you’ve not got around to looking at yet?
Here are a few areas to consider:
- Business status – check your business status and decide whether you’d be better off becoming a limited company or limited liability partnership. A staggering £4.2 billion is being wasted through inappropriate business status.
- Low energy and low emission equipment – switching to a low emission car such as a hybrid could save tax in the form of enhanced capital allowances, as could switching to other energy saving machinery.
- Avoid tax penalties – just being organised and completing paperwork and returns on time can save money in avoiding late payment fines.
The above are five funadamental ways you can possibly save money, but there are many more and once you’ve seen how much can be saved, with some basic expediency, your appetite may be whetted to look at other ways to reduce costs. Why not also encourage young employees to learn to drive so they can be flexible staff members who can travel to meetings or appointments without the need to book expensive train tickets.