26 August 2014
If you're a small business or startup, every penny counts. These budgeting hacks will help you save money and reduce your overheads.
When you’re a small business or are just setting up your startup, it’s imperative that you don’t spend money unnecessarily.
Below are just some of the ways you could cut your costs. However it’s worth considering whether you are trying to save money for the short or long term. For example, buying your own premises may save you money years down the line, but it’s is a huge upfront cost that most businesses would not be able to fund in their infancy. Therefore, most businesses will opt to rent a unit or office for their business, or even work from home.
When considering how to reduce your startup and ongoing costs, tailor these suggestions to your business and don’t forget to keep evaluating your needs, as they often change as your business develops.
This might include IT, office equipment or machinery to produce your goods. One consideration is whether to buy or lease. Just as with buying a premises, buying the equipment you need may be cheaper in the long term. However, if you lease an item, e.g. a photocopier, maintenance should be included within the hire cost, so it could work out as more economical, as you wouldn’t be responsible for maintenance or parts. Similarly, if you rent a serviced office, furniture is included within the price, so you don’t need to worry about this.
If you want to buy your equipment, one way to save money is to purchase the item second hand or reconditioned. This can save you money without compromising on the model or specs that you need/want. You could also consider whether you could compromise and buy a cheaper version, e.g. do you need the latest tablet for your business? You may be able to get a better deal on a previous model. Whatever you decide, make sure you shop around to get the best deal.
If you have a team, rather than buying equipment for all everyone, you put systems in place to enable them to bring their own device to work. Some staff prefer this and it will you money on equipment – you just need to be careful about security.
If you need support for your business, but aren’t sure whether you can afford or if you need a permanent member of staff, look at these different staffing options. For example, while you may generally pay a freelancer slightly more than you would a permanent member of staff, as you would only be paying them for set tasks; it may work out to be more economical overall. Plus, you would be making cost savings on your premises, as you wouldn’t need to assign them desk space.
Alternatively, if you have enough work for employees but not the skillset you need, consider offering training to new or existing staff. This not only helps to develop your staff and increase their job satisfaction, it may also be cheaper in the long run. With increased satisfaction, your staff are also more likely to stay with your company.
Where you work may or may not be something you can compromise on, depending on the type of business that you run.
Swanky premises in the centre of town are likely to be more expensive than further out of town. Fully serviced offices mean you don’t have to worry about setting up your office, but a managed office gives you the ability to furnish your workspace how you want and you could save money by organising your own IT/telecoms providers.
Work out how much office or workshop space you need so that you’re not paying for square footage that you don’t need. Before you sign up to a lease or licence agreement, it’s also worth investigating whether there is any flexibility to expand or reduce the size of your unit in the future, to match your requirements to any changes within your business.
If you’re not likely to have many meetings with customers or suppliers for example, you could save money by basing yourself in or near a business centre with affordable meeting rooms that you can hire when you need them. On the other hand, if you’re planning on numerous meetings a week, it may be more economical to include space for this in the unit that you rent.
Alternatively, if you don’t need professional workspace, you could save even more money and work from home. Depending on the needs of your business, you could rent a virtual office or hire a virtual assistant to help you convey a professional image for your company. This could be particularly useful if you travel a lot as part of your business, ensuring you don’t lose any customer queries or leads.
If you know you’re going to need the items and that they’ll be usable when you come to need them, then buying in bulk could save you money. However, this isn’t always a sensible way to save money. For example, if you’re producing some marketing materials for your business e.g. flyers, the more you buy over a certain amount becomes cheaper. However, there’s no point buying an extra thousand flyers if realistically something may change by the time you want to use them, e.g. if you’re advertising a seasonal promotion. Plus, you need to make sure you have room to store the extra items.