At the beginning of each financial year I find it’s a good idea to look at the business in a way that can assist us in our growth plans for the year ahead.
Here are some ideas that may be useful cost saving tips that any type of small business can use to help improve their cash flow. It’s might not be as hard as you think to shave 10-20% off your business costs.
1. First look at your monthly P&L to get a clear idea of where your money is being spent and how much your business needs to save.
2. Look at your business assets, evaluate if your business really needs them as clearing assets you don’t need will cut the cost of your business insurance quote.
3. If you rent office space, look at renegotiating your lease. If you are not using all the space you have, think of renting part of your office out – many businesses are now sharing office space which could be mutually beneficial if the other business is in a complimentary field.
4. Go Green – use energy saving lighting and renewable energy efficient products in your office to cut energy bills. Set a policy to turn off all electrical equipment if unused. Don’t forget to shop around for a cheaper energy provider!
5. Time for your fax machine to go. It’s slowly becoming redundant as technology allows businesses to fax from computers – thus also saving you the cost of fax paper and calls
6. Go paper-free. It isn’t necessary to use so much paper. Emails can be sent instead of letters; documents can be created as PDFs and emailed – as can invoices (if your customers want them on paper, they can print it out themselves)
7. Do you really need an inkjet printer? Does everything really need to be printed in colour? Mono laser printers are much cheaper, and cheaper still if you finance them as this is a deductable expense. If your business depends on you having a coloured logo, consider having headed paper printed as this could be cheaper in the long run.
8. You don’t really need to buy your equipment new – you could simply invest in second-hand office equipment, furniture etc. and use finance to make it a deductable monthly expense.
9. Do you actually need your office space? Could your business operate effectively with staff working cloud based from home, which could literally save you thousands?
10. Are you over-stocking? Look at your product lines, if they aren’t generating a worthy profit margin, it may be time to cut your losses by liquidating the stock. It will free up some storage space as well as capital to reinvest into your business.
11. Shop around for lower cost storage for your stock. Or renegotiate.
12. Keep your eye on what your competitors are charging, especially locally. You don’t want to be losing business because you are overcharging; or income because you are undercharging.
13. While most would advise you to hold on to your cash for as long as possible, you could be saving your business quite a bit if you negotiate to pay early and take advantage of early payment discounts.
14. Charge interest to those who choose to pay your business late. You are entitled to claim interest when an invoice is deemed late, how much will depend on the industry and client best to get specific advice on this.
15. If you need to recruit consider using interns. In this economic climate there are plenty of young smart people looking to get their foot on the job ladder, rather than remaining on the lounge, they are willing to gain valuable work experience through internships. Paying for travel expenses can be much cheaper than a wage. Ensure you adhere to the industry guidelines for Internships.
16. Make sure that if your taxable income is less than the previous year you don’t pay tax based on last years figure; speak to your accountant who could also give you more money saving advice.
17. Don’t be scared to negotiate, it could get you a better deal.
18. Join a business or trade association, these can help you to reduce your operating costs, expand your customer base, improve your cash flow and increase your profits.
19. Cut travel expenses by holding web conferences or having Skype calls which will also help lower your business’ carbon footprint.
20. Always think of the COST. If you have to hire a new member of staff will your sales increase? If you get a new piece of equipment will your productivity increase? If the answer is no – don’t do it just yet!
Remember these are only some options you could consider and not financial advice – as always you need to get your own professional advice to ensure you make the right decisions around any business or taxation matters.