Finance 19 May 2017

Six smart ways small businesses can save money

Maintaining cash flow can be a major issue for a small firm

Small business owners don?t usually have vast reserves of cash they can dip into should things get tough. Here, content head at digital marketing agency?BlueGlass, Irma?Hunkeler, gives six smart ways small businesses can save money.

Life for a small business is rarely easy, and with maintaining healthy cash flow a major issue, opportunities for saving money ? however small ? should be seized wherever possible.

Use freelancers

The ?gig economy? has its fair share of critics, but use it well and it can really be to your advantage. Lots of companies today are employing freelancers to take on a range of jobs, from email marketing to business development to cyber security, and everything in between.

There are now 1.91m independent professionals according to The Association of Independent Professionals and the Self-Employed (IPSE), and the UK?s burgeoning freelancer base is a great resource you could tap into if you need something done but want to save costs at the same time.

Using freelance capacity is a much more flexible option than recruiting a permanent, in-house member of staff. It allows you to employ someone for a specific period of time to do a job, with the rate agreed upfront.

Encourage employees to be financially savvy

It pays to be smart with money at work. While you might be looking for ways to tighten the purse strings, are your staff doing the same? Encouraging them to help find ways the company can save cash, however small, is a no-brainer.

If you?re big enough, you could organise a workplace investment scheme or offer your employees suggestions on how they could save money ? such as a cycling to work in order to cut commuting costs.

Remember that employees have an appetite for saving. This infographic shows that even when winning ?50 playing online games, for example, most people would choose to keep it in the bank rather than spend it. So, if your employees are keeping an eye on their own wallets, it?s likely that they?ll also keep an eye on their employer?s wallet too.

Review, review, review

A tip from the world of personal finance that we can apply to ways small businesses can save money is to review outgoings and strike out any that you don?t need. Just as consumers often have gym memberships, magazine subscriptions and paid streaming services that they rarely use, it?s likely your company does too.

Review your spending and get strategic ? if you?re definitely not using something that you?re paying for, and it?s having no tangible effect on the company, get rid of it and save the money, or put it into something worthwhile instead.

Offer flexible working

Employees now have a right to request flexible working, so expect it to become an increasingly popular way of working in the coming years.

It?s not hard to see why employees want to work remotely, working from home allows more time with friends and family, makes it easier to attend appointments, and generally improves work-life balance.

So, how does that reflect to ways small businesses can save money? Well, if more and more of your staff start working remotely, it could allow you to achieve greater cost-effectiveness and efficiency. For example, saving on overheads when employees work from home. It could even allow you to rent a smaller workplace, saving you significant amounts of money.

Go green

Becoming more energy-efficient is a win-win. It?s good for the environment and good for your bank balance. There are lots of simple ways you can reduce your energy consumption. These include printing on both sides of paper to reduce waste, only having the heating on when you really need it, using energy-efficient light bulbs.

Negotiate with suppliers

Whatever sphere you operate in, it?s likely that you?ll depend on suppliers for a number of tasks. Review how much you?re paying your suppliers and think about asking for a discount. If they want to keep your business, they?d usually opt for a reduced rate rather than lose their customer entirely.

Another option is to ask for discounts for placing bulk orders or paying early. Focus on the suppliers you have good, long-term relationships with ? they?re much more likely to hear you out.

Irma?Hunkeler is head of content at?BlueGlass, with experience working for clients in travel, retail, recruitment, technology and the third sector.

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