2012 is going to be a tough year. Across the country, small businesses are worried about what the next 12 months will bring.
But, while it brings uncertainty for many, the new year also presents a number of opportunities. It is a time for fresh starts – and what better way to usher in 2012 than by reducing your outgoings?
Business owners must be alert to their expenditure at all times, but this becomes increasingly vital in times of economic turmoil. Here are some top tips to help you cut your spending, without harming your business.
1. Start reading your bills
It is extraordinary how many people do not read their bills. This is particularly common amongst those who tend to pay their bills by direct debit. Make sure that you understand exactly how much you are paying, and for what. Unless you know exactly what’s going out, you can’t work out how to reduce it.
2. Make a budget
Having made sure that you understand what you’re already spending, take some time to work out exactly what you can afford – or, perhaps more importantly, what you can afford to cut. Make a list of all your current outgoings, and consider which are absolutely necessary. Prune back the excesses – but make sure not to curtail your ability to do business effectively in the process.
3. Consider an accountant
A good accountant should be able to save you money. They will of course charge for the services, but they should be able to cut your outgoings in the long-term – either by enabling you to spend more time on profit-generating activities, or by showing you how you can cut your tax bill.
The start of the new year is a good time to renegotiate arrangements with your suppliers. Approach your suppliers and see if they will improve the terms of your contract. If they won’t, and if you’re confident you can get a comparable service elsewhere, don’t be afraid to shop around.
5. Think like a startup
Startups are forced to be frugal. This might seem like a hassle when you are forced into penny pinching, but the ‘startup mindset’ actually provides a pretty sound basis for building your business. Try to continue thinking like a startup, eliminating unnecessary costs wherever possible.
6. Lease or go second-hand
If you need to invest in new equipment, think carefully about whether or not you need to buy new. It is often possible to make significant savings by going for second-hand or refurbished equipment. Alternatively, you might be able to improve your cashflow situation by opting for a lease arrangement.
7. Team up with others
It might seem counterintuitive, but you may be able to make savings by teaming up with other businesses in your sector. For example, why not approach similar firms and investigate the possibility of sharing advertising costs? This works well in the creative industries, with record labels often sharing page space in magazines and splitting the cost.
8. Use technology
Technology can help you to cut your costs, while improving your outcomes. Consider ways that you can use free technologies in place of traditional solutions. For example, why not try a VoIP solution instead of your landline?
9. Think about utilities
Utility costs are frequently overlooked by small business owners. Do some research to determine whether or not you are getting the best possible deal. Shopping around and changing suppliers is relatively easy with services like uSwitch For Business.
10. Spend smarter
Finally, as well as considering how you can spend less money, take some time to think about how you can spend that money more effectively. Are you using your resources in the most efficient manner possible? Would the money you are spending on print advertising be better used online? Could you move some of your cash away from overheads and instead use it for marketing? By spending smarter you can make more of your money.