Saving money for your small business
Running a small business certainly isn’t a walk in the park and it’s become a lot harder following Coronavirus. Money worries in their various forms are likely to be on the list of most small business owners. Clients not paying on time, unexpected outgoings and a fall in sales can all lead to financial pressures. Saving money is something that should always be in the mind of an astute business owner.
Some of these are in your control and others aren’t. But how can you make savings now to help your cash flow?
Here are five things to try.
1. Renegotiate monthly bills
We can all be guilty of this, whether it’s business or personal bills. You know what it’s like, you’ve been paying a provider for a while and never get around to seeing if there is a cheaper deal.
The fact is, most businesses, whether it’s a phone provider or a gym, don’t want to lose customers. There is no harm in calling to see if you could be put on a better contract.
Check the latest deals on a price comparison website first, then call your current provider to see if you can haggle. If they can’t keep you, check if there are exit fees and start the switch to another provider.
2. Check that you still need all of your subscriptions
There are countless products and services out there, designed to make your life as a small business owner easier. Invoicing, project management and marketing tools can be a big help but check which services you’re paying for and see if you still need them.
You might be paying for multi user licences when in reality, only one or two people are using it. It might seem like a small amount of money each month but added up over the year, that’s money that could be back in your business bank account. If you need to re-subscribe or increase the level of cover in the future, then they’re not going to say no!
3. Increase loan repayments
You might have taken out a loan to set up your business, buy equipment or pay for expansion plans. It sounds a bit counterintuitive but if you pay more each month, you can repay the loan quicker and reduce the total cost of the interest.
4. Saving money by renting out office space
If the Coronavirus crisis taught us anything it’s that it’s a lot easier and more convenient for employees to work from home that many of us thought. As a result, many businesses are finding that they do not have the need for Office space that they once did.
So do you have spare office space? If you do, it could be earning you money. There are thousands of people who are self-employed but don’t have their own office space. They may work from home most of the time but need a desk in town a couple of days a week.
Premises are a big overhead, so if you can, why not recoup some of the money. There are lots of websites which list available office space and desks. Office Genie is one example.
Alternatively, get rid of your office space completely if possible and consider an office share.
5. Saving money by using freelancers
If you want to free up time to get on with running your business, it may pay to use freelancers. A freelancer is paid to complete a task or project but not employed by the business. You don’t need to provide a freelancer with the same benefits you would an employee. There is no pay for sick leave or holiday, so it can be financially beneficial.
Perhaps you need help with your marketing, some data entry, video production or secretarial support. We can’t be experts at everything, so as well as the financial benefit, you’ll gain experience and knowledge without permanently increasing headcount.
Speak to your colleagues or peers to see if they can recommend anyone or use LinkedIn to find freelancers who specialise in the skills you need.
Don’t forget that a good accountant can save you money too
OK, this is really point number six, but who’s counting! Utilising cloud accounting software, such as Xero, will help to save you money. It enables you to check cash flow, pay invoices and monitor sales on the move with a mobile accounting app.
Employing the services of a good accountant will also help to save you money and help you to grow your business.
About Ian Henman
London lad Ian joined THP in October 2016 to set up and manage THP’s new legal services department.
Starting at the tender age of 19 Ian spent almost 30 years building his career at Natwest/RBS becoming a business client account manager to many local businesses.
Ian was looking for a new challenge and as THP was searching for someone to gain accreditations and spearhead the legal services department, there was a clear synergy.