With soaring interest rates and rising inflation, the last year has been tricky for all of us and none more so than for those running a business with many smaller businesses folding due to higher costs.
But while the cost of living crisis is a concern for businesses of all sizes, there are some easy things you can do to try and cut business costs. We take a look at what they are.
1. Reduce your energy bills
Given the astronomical rate in which energy bills have gone up over the last year, it goes without saying that trying to keep your electricity and gas bills as low as possible is a good idea. Some easy things you can do include:
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- Make sure your thermostat is set properly, so you’re not wasting energy when nobody is in the office
- Use energy saving lightbulbs
- Ask everyone to turn their computers off when they go home and not leave them on standby, as that wastes electricity
- Turn off all printers, microwaves, kettles, and any other electrical appliances at the socket when not in use.
And don’t forget if you work from home full-time or for part of the week, because you either live far away from your office, or because your employer does not have an office, you can claim tax relief for gas and electricity. It’s not much, but every little helps. You can find out more from the HMRC website.
2. Review your suppliers
We’re all guilty of sticking with suppliers we know, partly because we trust them, but also partly because it takes time and energy to shop around. But given the cost of living crisis and how much prices are rising, taking some time out to make sure you are getting the best deal possible is a wise move.
Take a look at all your suppliers, including things such as your business bank account, or web hosting, and review any that don’t have a contract or have contracts that are about to expire. You’ll often find that if you move your business to a competitor, you’ll be able to benefit from bonuses or discounts.
Then make a list of anyone you have a contract with along with when the contract ends and put a date in the diary to review it. This should be something your business does anyway, irrespective of rising prices.
3. Consider whether you really need to outsource
We’ve spoken before about how using consultants and outsourcing for some of your workload is a great idea, especially if you are just starting out in business, but during the current cost of living crisis you might want to review whether this is really necessary.
If you already have consultants in place, it’s worth reviewing whether what they do for the business is a nice to do or a must-do, such as payroll. Then work out whether it would actually be more cost-effective to bring that role in-house. You may find you have a number of staff members who have both the capacity and desire to take on other tasks, such as updating your social media accounts or managing payroll.
And the added advantage of offering current employees training opportunities and the chance to expand their skill set is that it will hopefully keep them committed to your company for the long-term, as hiring new staff can be a lengthy and costly process.
4. Stay on top of your invoicing
It goes without saying that you need to make sure you are paid on time, as otherwise it could have a detrimental effect on your cashflow and even see you having to curtail some of your own business activity, which could impact on your bottom line.
But remember always pay your own bills promptly, as the last thing you want is to be hit with late payment penalties.
5. Go paperless
While a printer jamming is an inevitable part of business, the real question is – did you need to print in the first place? While the cost of ink and paper doesn’t seem extortionate, it all adds up over time, especially if people are printing when they really don’t need to be.
Review all areas of your business and determine whether it would actually be more cost-efficient (and better for the environment) if they went digital. You might not be able to do it across the whole of your business, but even reducing the amount of paper and ink you have to order is going to help.
6. Check any business subscriptions
Remember that thing you signed up to a couple of years ago, that seemed a really good idea at the time, but you haven’t looked at since? Every business has a few of unnecessary monthly or yearly subscriptions, whether it’s software, apps or even magazine subscriptions. If they haven’t been used in a while, cancel them or if they are only used infrequently, see if there are any free versions that will do the same job.
7. Embrace Zoom
The pandemic introduced us to the joys of remote working (and pets joining meetings!), but just because the pandemic is now over, doesn’t mean everyone should be in the office all of the time.
Only having everyone in a couple of days a week will definitely help with your energy bills (and paper usage!) and in fact, you might find you end up in a position where you don’t need an office at all, which will definitely save you a few pennies.
And if you do have any business meetings, review whether they could be done online, as this will help cut down on business expenses as well as valuable time out of the office.
And one final tip – make sure you have a good accountant who can help you identify any tax savings, reduce your tax liabilities, and keep you informed about any grants or schemes your business could benefit from. Give us call if you would like to know more.