7 Simple Ways to Save Money as a Small Business
As a small business, managing your costs effectively is vital to your long-term success.
Finances can change quickly. An unexpected expense, a sudden rise in supply costs or a slow month can all impact your future. This is where savings as a business can really help.
With simple, practical steps, you can have more funds to invest in growth, make better strategic decisions and build your business's future.
But how do you actually save money as a business?
In this guide, we’ll run through why saving matters and share seven simple practices you can implement in your business today.
Benefits to saving money as a small business
As a business, building healthy saving habits can bring many benefits. By building up your business savings, you can:
- Plan for improvements to your business, such as better products, equipment or a larger office space to improve work efficiency.
- Keep spare funds in case unexpected expenses arise.
- Cover quieter periods in the business if sales start to dip.
- Fund training and development for your team to improve business performance.
Ways to save money as a small business
1. Open a business savings account
One of the easiest ways to start saving money as a business is to open a business savings account.
With a savings account, you can put aside your savings and earn interest on them over time.
This helps you plan for unexpected costs and build interest that can be used to strengthen the future of your business.
If you want to learn more about the benefits of business savings accounts, or want to discuss options with one of our specialists, you can use our online enquiry form to get in touch.
2. Buy only what you need
As a small business, it is very easy to fall into the trap of spending money on things that don’t line up with your long-term goals.
One of the biggest culprits is unused subscriptions. According to SpendDesk, inactive subscriptions cost businesses up to £600m annually.
To tackle this, track your expenses and create a simple system that helps you answer these important questions.
- Do we really need the resource?
- Can the cost be reduced by changing supplier or plan?
- Is there a different approach that could meet the same needs?
A pragmatic approach like this frees up funds you can use to grow your savings or reinvest in the business.
3. Negotiate with your suppliers
One effective way to save money as a small business is to negotiate with your suppliers.
If you have a strong relationship with your supplier, you can often negotiate better pricing terms and discounts, especially if you’re a valued customer.
To prepare, make a list of your external expenses and compare prices with alternative suppliers to ensure the price you receive matches the market.
Armed with research, a simple conversation with the suppliers could ensure you’re not overcharged, secure better pricing, and save your business money.
4. Recruit and outsource effectively
Recruitment costs can be very expensive. Agency fees and advertising costs can be significant and so it is important you recruit effectively so your money doesn’t go to waste.
When you’re hiring, focus on positions that directly contribute to your business goals. If you need support for the short term, consider hiring freelancers or reaching out to an agency to tackle this task.
This approach can help you stay focused on priorities. You won’t need to take time away to manage recruitment and you can ensure you’re making the most of your cash flow and time.
5. Cut energy costs
It might sound obvious, but becoming more energy efficient with your operations can significantly help with business costs and better yet, help the planet too.
Some of the simple steps include:
- Turning off unused equipment like, lights
- Switching to a more renewable, efficient energy supplier.
Making small changes like this can add up. By lowering these overall expenses, you’ll free up funds that can be used elsewhere in the business.
Sometimes buying second hand resources like PC’s or office equipment can both save money and contribute to sustainability by minimising waste requiring disposal.
6. Automate repetitive tasks
Over the years, automation technology has become more prominent in the workplace to decrease the need for manual input to cut costs, especially in this new generation of AI.
Here are a few examples of how simple automation can help a small business lower its manual costs:
- Accounting: By using accounting software, you can automatically calculate staff wages, generate invoices and maintain records, ready for checking.
- Customer enquiries: Utilising automated response software such Chatbots can answer simple customer enquiries without requiring staff involvement. For example, if a customer asks, “What are your opening hours?”, the chatbot can instantly reply or forward the query to the customer service team if a more detailed response is required.
- Social scheduling: Using simple automation tools to schedule posts, and plan content over time, reduces the need to monitor and spend time making social posts every day.
Solution: To understand where to begin with automation, review your manual processes and identify any that are repetitive and time-consuming. Search online to see if there is software that can reduce these manual processes. Many of these software companies will also offer free trials, so you don’t need to commit to a purchase if you’re not satisfied.
7. Optimise office space or go remote
Small businesses often don’t need much space to operate. If you’re in a larger office than necessary, consider downsizing to cut costs on rent, heating, cleaning and office supplies.
To save even more, consider hybrid or remote working. To implement this, assess which roles are required more in the office and how often you need to meet. This could reduce the amount of space you need and your bills, while keeping your business running smoothly.
Help and support
Need help with managing your business savings? Explore our useful resources on managing your business savings:
How to open and manage a business savings account
Get in touch
We’re here to help your business make the most of its money and give you the savings support you need.
If you’d like to discuss one of our business savings accounts and find the right option for your business, submit an enquiry and one of our specialists will be in touch to help you get started.
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