It’s not just businesses that need to think about ways in which they can cut expenses. Individuals, small and large businesses and even the massive corporations that survive during any economic downtown all have to watch the pennies and cut back where possible.
As a start-up business, it’s essential that you try and cut the costs from the very beginning. Many small start-ups don’t have the capital to mess around with, so every pound counts. While there are various things that you can cut back on to save yourself some cash each month, there are other areas in which you shouldn’t scrimp at all.
Many small businesses begin at home, with one person registering self-employed and taking on the world themselves. While in the future, these types of businesses can grow and expand to include other employees and extra expenses, at the beginning, you don’t need to spend on unnecessary aspects.
For example, do you really need a small office to work from? While it will help to separate work and home life, paying the rent for the premises each month can be a huge burden when you’re only just finding your feet. Cut back on the rent and set up a small home office to save yourself some cash.
Similarly, many new businesses think that they need a business bank account – after all, keeping everything separate can certainly help with the paperwork when it comes to tax return time. However, do you really need to pay out each month on the luxury of a business bank account? In the beginning, this isn’t needed and can be avoided by simply using a separate current account. If you do decide that a business account is needed (especially when you’re established enough, or hire employees), make sure that you research the free options that are available rather than jumping into an account that expects a monthly payment for the luxury.
A major cost that small businesses encounter each month is the cost of hiring employees and while, as you grow and expand, it’s inevitable that new recruits may be required, you should try and weigh up the pros and cons before head for the recruitment agency!
Simple savings are also available during day-to-day life, such as cutting back on your energy use, not printing emails and avoiding the need for postage by using online correspondence. Every little helps!
There are certain things that are definitely investable, though. Insurance is an absolute must, and while your business probably won’t need all the different business insurances that are available, chances are you’ll need something. Ask yourself, do I need public liability insurance? Or maybe it’s simply a need to update your home insurance to include business activity – it’s something that shouldn’t be scrimped on because if you ever face a compensation claim, you’re going to need as much help as you can get!
It’s also recommended to pay for accounting advice – even if it is just to help complete your tax return. While many people choose to do their accounts themselves, having a professional on hand to make sure you’re paying exactly what you need to pay without overspending can help massively.