Running a business of your own – whether it’s a fledgling start-up or a more established company with its own commercial space – requires a constant juggling act. Not only do you have to focus on boosting your revenue, but you also have to find solutions that will help you reduce unnecessary expenses to give your business the best chance of acquiring a healthy bottom line.
While it may seem counter-intuitive to make cuts to grow, the truth is that finding effective ways to boost your cash flow will result in more funds to channel into development. But how do you reduce costs and lower your expenses while still prioritising business growth? Here are some top tips to start you off!
Every Little Helps
Tesco’s motto can often effectively be applied to cost reduction measures. Sometimes, all it takes for a company to achieve healthier finances is to eliminate a number of small but unnecessary expenses that are draining your budget over time.
For example, does your business need that gleaming coffee machine with those delicious but very expensive pods? Or can you get by with a kettle and some nice-tasting instant? Do you need to waste money on those pricey cleaning products, or will supermarket own-brand products do the same job for a fraction of the price? Do you really need to spend money on all those office supplies, or can you cut costs – and become more efficient into the bargain – by doing more tasks online?
You might be surprised how a little judicious pruning here and there can make a difference to your expenses and give your business bank account a welcome boost, which you can then use for more important things. Like product development and marketing, for example!
Become More Energy-Efficient
Rising energy bills have hit households and most businesses hard, with over 1 million small business owners across the UK trapped in long-term contracts that have them paying through the nose for their energy. Meanwhile, other businesses still need to secure a contract.
Whatever situation you currently find yourself in regarding your energy supplier, it’s crucial that you find ways to become more energy-efficient. Not only will you become more environmentally friendly in the process (a pressing concern these days), but you will also lower your costs simultaneously. This will leave you more money available to invest in your R&D and other vital aspects of your business.
One way to significantly reduce your energy expenses is to use more efficient lighting, as the money you spend on illuminating your workplace can account for up to 40% of your bills. Swap any older light bulbs for energy-efficient halogen or LED options, and ensure that all lights and equipment are turned off when not in use.
It would be best if you also were more careful regarding your climate control. Instead of running that expensive air-conditioning, how about using carefully placed fans around the office when the temperature isn’t too hot? During the winter months, you should also try and find a ‘happy medium’ when it comes to setting the right temperature so you’re not wasting money on overheating your physical space.
Finally, focus on reducing your energy waste wherever possible. Put up posters around your workplace to educate your staff on how they can reduce their energy use, swap any energy-draining equipment or amenities for more efficient versions, and make sure all of your building’s vents, fans, and radiators are in good working order.
Don’t Be Shy To Seek Assistance
While you may feel reluctant to ask for financial assistance, the truth is that there is no shame in applying for any form of financial relief that your business is entitled to. In fact, it can give you a welcome cushion that is essential in helping you develop your company and take it to new heights.
One form of financial relief you shouldn’t hesitate to explore is tax credits. For instance, if your business is involved in developing innovative new products or services, you could be entitled to HMRC R&D tax credits.
If you’re unsure whether this is a form of relief that you could claim, or if you’re not sure how to even make a claim in the first place, you can contact Buzzacott to enquire about R&D tax credits in the UK. They can give you all of the help and professional advice you need and will even guide you through the application process if it turns out that you’re eligible.
If some of your company’s equipment is starting to deteriorate or break down, you’re probably worriedly mulling over the expense of replacing the inventory it with expensive new models. But why not reduce your stress levels and your expenses by opting to buy or rent second-hand equipment, appliances and technology instead? After all, you can easily find second-hand items that function just as effectively as brand-new ones but cost a fraction of the price.
Cut Down On Travel Expenses
When it comes to cost-cutting, it’s important to prune any unnecessary expenditures – and these days, that can often include travel.
After all, Covid-19 and the exponential increase in online meetings, lectures, and brainstorming sessions conducted via Zoom or Teams have taught us all that it’s no longer always necessary to be in the same room together – or even the same time zone. Business, can still be effectively conducted long-distance, saving both time and money by reducing costs in the process.
So, what are you waiting for? Cancel any upcoming business trips or conferences that aren’t absolutely necessary to your company’s growth, and use all of the money you would have spent on travel costs for more useful purposes. Funnel them into your R&D department, or use them to market your latest products or services and expand your customer base and ultimately increase profits.
Of course, in some cases, business travel is vital – for instance, to build up trust and rapport with a new client or business partnership – but even reducing the number of business trips you and your employees take can help to make a difference to your budget.
While you may think that you need a sizeable permanent team on hand to help you grow your business, the truth is that a number of tasks can be effectively outsourced to freelance talent. This includes everything from marketing campaigns to human resources responsibilities and even bookkeeping.
Outsourcing these vital roles to freelance professionals will help you save indirect costs while still ensuring that your business runs efficiently without cutting corners.
Of course, some things could be improved when you opt to outsource, especially if some of your freelance talent is based overseas. However, if you’re careful and strategic about the third-party talent you hire, you could reap the rewards – both generally and financially, as you won’t have to pay a full salary or the other expenses that come with hiring an employed member of staff.
Hopefully, by now, you will have realised how simple it can be to reduce your business’s outgoings and increase your bank balance.
While some changes will undoubtedly be harder to make than others, you’re bound to see benefits in your bottom line at the end of the day. What’s more, any funds you save through these helpful cost-cutting measures can then be channelled into fuelling the development of your business, helping you and your personal situation reach new heights and cement your place in your sector.