It’s no secret that times are tough for small business owners at the moment. Elite Business Magazine found that over a quarter (26%) of SMEs are now spending up to 40% more on energy each month compared to the previous year, with some reporting an astonishing 150% increase in their monthly energy expenses. That’s a lot for any business to handle – but if you’re just starting out, it can feel impossible.
At times like these, it’s more important than ever to make whatever small savings you can. Here’s a list of 10 ways that small businesses can cut costs in 2024.
1. Consider a Virtual Office
In the age of hybrid working, do you really need to hire a physical office space for your business? The rise of virtual offices has made remote working easier than ever – and using a virtual office business address is a fantastic way to cut costs.
A virtual office is a registered business address service that allows you to use a prime business location as your official office address on Companies House. It’s a physical office that meets the UK Government requirement for all businesses to be registered at a physical location that has the capacity to receive your business’s official correspondence, including letters from HMRC. It then provides virtual office assistant services including mail handling to make sure you never miss an important piece of post.
A virtual office gives you all the reputational benefits of renting an impressive office space in an upmarket district. But with prices starting at just 0.41p per day, it’s definitely the cheaper option! Plus if you choose a virtual office business address service like Impact Brixton, which also has a physical space, you’ll also be able to access a coworking space and meeting rooms to give you the best of both worlds!
There are tons of virtual office services in prime business locations including London. For advice on how to choose a cheap virtual office that’s perfect for your business, check out our blog post on how to select the ideal virtual office.
2. Ditch Traditional Marketing Methods
One of the big mistakes we see a lot of small businesses make is to pour too much money into marketing too early on. Remember – when you’re just starting out, all you need is a couple of returning customers to give you a steady cashflow and help you get your business off the ground. So instead of focusing on acquiring more clients, save your marketing budget and pour your efforts into building a really good relationship with your current clients to make sure they come back.
And don’t forget to tap up your contacts – who do you know that might benefit from your services? Reaching out to the network you already have is a great way to get new clients without spending any money at all on marketing.
Lastly, unless you’re seeing a huge return from the flyers and leaflets that you’re printing, it could be a good idea to move your marketing entirely online. This will help you save cash on printing and distribution, while allowing you to focus on gathering a following and gaining clients online. Try pushing a fraction of your traditional marketing budget towards a paid social media ad. You might find that you make a better return on investment!
3. Share Equipment with Other Small Businesses
Let’s say you run a printing business (we’re very impressed if you do!). You’ll need quite a lot of specific equipment, so it’s worth seeing if there’s another local business in the area that might have some equipment that you could rent at a fraction of the price of buying your own (without stepping on their toes, of course!).
This is an especially good tip for businesses that prepare food. Do you really all need your own oven at the beginning? Or can you just buy one between you and make sure you only take work on alternating days? Sharing equipment is a great way to save money and make contacts – you could build a really strong network of like-minded businesses who are all willing to support each other.
4. Set Up a Skills Swap
Another way to go about reducing your costs as a small business is to offer a skills swap. Do you know a fantastic copywriter who could put brilliant words to your designs in exchange for some eye-catching graphics to go with their copy?
Setting up a skills swap has so many benefits – not only do you save money on hiring people, but you also build your portfolio of work and form solid working relationships with other freelancers and small business owners.
If you’re wondering where to find these fantastic freelancers, considering hot desking or taking out a virtual office at Impact Brixton. We’re home to over 500 freelancers working across a huge variety of projects, and we’ve seen tons of exciting partnerships and collaborations formed in our space over the years. We hold regular networking events, and we’re always working to help our community find fruitful connections. We’d love to have you as a member!
5. Hire Freelance or Part-Time Staff
That period of growing a business where you’ve got enough work to need an extra pair of hands but haven’t quite got the cash flow to make a full-time hire is hard – and it’s where a lot of small businesses find themselves making a massive dent in their cashflow. But it doesn’t have to be that way!
There’s a huge pool of talented freelancers out there, and you’d be surprised by how many people are looking for a casual or part-time job. Think about parents who need to be home for the school run, or freelancers working across a number of projects. Not every new hire you make needs to be full-time – and you might be able to find someone who’s looking to work just a few hours a week on a flexible basis, which suits their requirements and fits your cash flow.
Coworking spaces like Impact Brixton are a great place to get chatting to people who might be interested. And if you reach out to us at hosts@impactbrixton.com, we might even be able to make a recommendation!
6. Skip Automatic Renewals
When you’re running your own business – and especially if you’re a sole trader – it’s really easy to lose track of the subscriptions you have. Chances are that you’re still paying for some things you don’t actually need.
Take an afternoon to go through your finances and see what you can cut down. This is also a really great opportunity to renegotiate any contracts that might be due to renew. You might find that you’re on an old subscription and there’s a newer, better deal available. Resources like Money Saving Expert are fantastic for helping you to do a quick and easy comparison of the services available to make sure that you’re using the option that’s the best value for money.
7. Cut Down Your Newsletter Subscribers
This may sound like strange advice, but bear with us because we did this super recently and it saved us a good chunk of money! When it comes to sending out a newsletter, the key metric really isn’t how many subscribers you have – it’s how many of those subscribers are opening your emails and clicking through to the links it contains.
Think about it – if you’re sending a weekly newsletter to 5000 people, but only 33.5% of them are opening it, then of what value really are the people who are just putting it straight in their email trash? You’re much better off cultivating meaningful engagement with the people who are actually interested in your content.
But how can this save you money? Well, if you’re anything like us then you pay a newsletter tool to host your subscribers so that you can easily send out a newsletter template. Those newsletter tools usually have different price packages – and the more subscribers you have, the more your monthly payments will be. So take the plunge and delete the subscribers who aren’t engaging with your content. This will allow you to better serve the subscribers who are actually interacting with your content, and the chances are it will reduce your monthly subscription fees, too.
8. Don’t Be Afraid to Negotiate
The advertised price isn’t always the price you have to pay. How many times have you been on the phone to your broadband provider with the intent of cancelling your subscription, only to be offered a much better deal to retain you as a customer? Only to leave you wondering why you were paying so much in the first place.
Be polite and be gracious – but don’t be afraid to ask your suppliers if they can offer you a better deal on your services. You might be pleasantly surprised by how much they’re willing to accommodate your needs.
9. Buy In Bulk
Honestly this is a piece of advice you could apply to pretty much every part of your life (but only if you have the space to house 56 toilet rolls). When you’re first starting out, it can be tempting to be conservative with your orders to avoid paying out too much money at any one time. But this often proves to be false economy – you end up making more orders, which eventually works out to be more expensive than if you’d taken the plunge and placed a bulk order in the first place.
Stay within your budget, but don’t be afraid to bulk buy. It can be daunting, but it’ll save you money in the long run.
10. Seek Out Financial Support
There’s absolutely no shame in asking for help. There are small business tax relief options out there, as well as grants that can help you to raise finance. Your suppliers may be willing to spread out repayments rather than taking one bulk payment, and your bank may be able to provide you with support, too.
And don’t forget that as a small business owner you can claim tax-deductible expenses across a broad range of categories, from office supplies to vehicle fuel to marketing costs. The tax system is there to help you, so make sure you use it to your advantage.
Conclusion
Deep breath, small business owner. It’s a tough ride out there, but there are ways to make costs and boost your cash flow. By taking a strategic approach to budget management, you can streamline operations and enhance efficiency. And don’t forget that we’re here to support you with a community of freelancers you can turn to for opportunities and advice. Find out more about what we do to support small business owners here.
