10 cost-cutting tips for a small business in the UK
Times are tough for small businesses. As profit margins diminish, any possible money-saving measures must be implemented, and quickly. According to a study by Kingston University, between 350,000 and 400,000 small businesses close each year in the UK. This article gives 10 tips on ways to save money, from making cheap business calls to cutting down on energy consumption.
Get paid on time
Receiving money late from creditors can cause a great deal of financial stress – it is estimated to cost British businesses £20bn every year. To avoid it, ensure that invoices are sent out on time, that the terms of payment are clear and that an efficient ‘chasing’ system is adhered to.
Advertise for less
Social networking sites such as Facebook and Twitter cost nothing to use, so make the most of them for advertising purposes.
Much of the equipment used in the day-to-day running of a business can be bought second-hand. Huge savings can be made at no detriment to the business – particularly with office equipment.
There are a number of ways to reduce a tax bill. ‘Green’ options include obtaining company vehicles that have CO2 emissions of 120g/km or less. This allows the owner to claim 100% capital allowances. Similarly, 100% tax allowances can be claimed on energy and water-saving equipment.
Cut energy consumption
Simple things like turning the lights off in rooms that aren’t being used can save up to 15% on electricity bills. Other useful tips include turning off computer monitors when not in use, reducing the temperature of the office by a degree or more, replacing all light bulbs with the energy-saving variety and recycling materials wherever possible.
Set up a VoIP phone line
VoIP allows businesses to make and receive calls using a business line based on their existing broadband infrastructure, thereby removing the need to pay for additional line installation. Providers such as Vonage (http://www.vonage.co.uk) have special packages offering phone lines for small businesses.
Share and share alike
Split costs with other businesses. If there’s unused space in the business premises, let it out to another business. Also consider engaging in shared advertising with sympathetic partners.
With a little investment of time in finding the best current deals, the total outlay of bills can be reduced by as much as 35%, according to the UK’s Forum of Private Business. For owners who don’t have time to negotiate deals individually, one answer is joining together with other small business owners in a buying consortium. This larger body can negotiate better payment terms, delivery frequencies and discounts.
Watch out for thieves
It’s a sad statistic that 82% of UK workers have admitted to stealing from their place of work. Even small thefts add up, so make sure employees know that it’s not okay to take pens or envelopes home with them.
Keep finances under control
Disorganised finances inevitably lead to money being lost. The better organised they are, the more easy it is to see where any problems may lie.