Money-saving tips for small firms

The road ahead remains uncertain for many small businesses, and against a backdrop of slowing growth, cash-flow management is more important than ever.

By Rosie Beasley at business insurance comparison site simplybusiness.co.uk

High input costs may threaten to swallow up revenue, and with limited prospects for borrowing money on the horizon, a business could easily flounder without careful stewardship of its spending.

Staff are a small business’s greatest asset, and SMEs rarely carry excess deadwood in their workforce. As such, redundancies are not normally an option, and businesses have to exercise greater creativity in achieving growth.

So where can savings be made? Here we examine ideas to help ease the pressure on your bottom line.

Financial matters

Good financial housekeeping can improve cash flow through your company. Consider the following elements to improve your balance sheet:

Collections – send reminders to debtors the day before payment is due, and be sure to chase down late payers.

Creditors – where possible, arrange agreements to delay or spread payments.
International payments – make sure prices are adjusted to reflect excess charges levied on clearing overseas payment.

Savings

As interest rates fluctuate, regularly move your cash assets around to achieve the best return, but be careful to check for penalties before closing accounts.

Overheads

Aim to reduce unnecessary expenditure wherever possible, for example in the following areas:

Space – office-based businesses could potentially downsize by allowing more staff to work from home, or by moving to a managed office space to save on shared facilities such as conference rooms, kitchens and bathrooms. You could look to make money from unused space in your premises through subletting.

Insurance – you don’t have to wait for your business insurance to expire to get a cheaper deal. The potential savings from switching insurer could more than outweigh any cancellation fee, so it’s worth checking your existing policy and shopping around.

When searching for quotes, keep prices down by selecting only the necessary level of cover for your business needs.

Energy use – as oil prices remain high, so too will utility bills. Look for simple ways to keep energy use to a minimum.

Make sure all lights and computers are turned out after hours, and where possible, switch to energy saving light bulbs. Look to reduce water consumption, and encourage all staff to help adopt a greener working ethos.

IT & consumables – curb unnecessary expenditure on office supplies, and look for savings on telephone and IT equipment and services.

You can even make money by using a premium rate phone number, but be careful if you are a consumer-facing business, as this will not improve your reputation for customer service!

Business rates – small businesses occupying premises that fall beneath the £15,000 rateable value threshold are entitled to a reduction in business rates on a sliding scale. Check that you are getting the correct discount from your council.

Outsourcing

Cut professional fees by paying only for expert skills that are lacking within your organisation. Insource wherever possible by bringing administrative tasks in-house.

Pricing

Reassess your pricing strategy to suit the prevailing economic conditions. Might a small reduction in price generate higher sales during lean times?

Conversely, be mindful when making purchases that competition is fierce, so always aim to negotiate on price. Barter wherever possible and take the time to shop around for the best deal.

People matters

There are many ways to ensure your workforce is as productive and as cost effective as possible, without resorting to the threat of redundancy.

Benchmark pay and benefits against current industry standards, and ensure incentives are directly linked to performance outcomes.

If possible, hire interns and work experience candidates to help take the administrative burden. Finally, aim to establish a cost-saving culture that runs throughout all operations of the business.

In summary, don’t be afraid to shake things up in order to find the savings. Just a little research, effort and imagination might make all the difference.

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By LaunchLab.co.uk  on   Nov 12,2008

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Keywords

money saving    HR    margins    insurance    money    financial   

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