Everyone knows that spending money is much easier than saving it, but giving relief to a business owner's battered bank balance could come easier than anticipated. Nowadays we have access to thousands of business solutions at the click of a button, and although wading through them requires time, energy and a special kind of dedication, sometimes small changes can reap big benefits for SMEs. From special gadgets to staff motivation, we spoke to five experts to find out what you can do to help keep a lid on costs.
Tools for smarter working
Nadia Finer is founder of Smartli.co, a website that shares tools and apps for startups and small businesses. She says: "If a tool can save you an hour a month then it pays for itself. I have built a business without really spending any money at all and if I need help from someone I have a network of freelancers.
"My business model is based on reviewing and writing so I am using things like FreshBooks to make sure I get paid for my time."
Finer recommends creating your website yourself to save money.
She says: "You don't need to go to a web design agency and spend hundreds of pounds on building a website. I used WordPress but there are others – you can get a really simple website that looks good and you can get it up and running really quickly."
Be energy efficient
Mark Woodward is owner of Green Directions, a conference centre and farm in Yorkshire where he lives with his family. When confronted with the issue of developing a property like his in an exposed location, the big issue for him was how to save energy, Woodward says.
He explains: "We inherited an oil-based boiler and were putting gallons of heating oil into it and still had a cold house. I investigated solar panels and wind turbines and the solar panels were ludicrously expensive a decade ago.
"I was able to buy the first wind turbine for £15,000. Most people can't necessarily put wind turbines up but now it is well worth looking at solar panels as an option." Now Woodward makes a profit through the generation of energy, producing more than 50,000 KW of electricity a year.
There are plenty of other, lower key ways to save money on energy, including using LED lights and insulating your workspace, Woodward says.
"A lot of workspaces are old buildings – if you insulate your external walls you have a huge opportunity to reduce your energy demand. Some properties are suitable for external insulation and that is cheaper than doing it on the inside."
Cash management
Neeta Patel, chief executive of the New Entrepreneurs Foundation says money saving should stem from cash management.
"I don't think it's about cost saving, it is about cash management - that's what we teach our young entrepreneurs. By the time you have taught cost saving, it's almost too late," she says.
If you are a startup or early stage business, one of the major costs is your staff and the associated overheads, but Patel says this is not an area to cut back. Instead, putting the right amount of money in to get the best people for the business and incentivising them to stay, will impact long-term on your bottom line.
"One thing people often don't realise is incentives for staff don't actually cost that much and they mean a lot to staff," she says.
Patel also recommends looking around before you plump for the first office you find, and negotiating with the landlords.
She says: "You can get better deals for example by paying a few months in advance or signing long-term contracts. People often end up paying up to a 35% premium on what they should be paying."
Get your staff involved
Mark Dyble, responsible for generating better financial results with clients at SME business solutions, says one of the best ways to save money is to get your staff on board with your targets.
He explains: "Get staff to brainstorm ideas – this is a good way getting them involved and engaged and contributing in a creative way. It is part of everybody's remit to keep costs as tight as possible."
It is also important to continually review contracts, Dyble adds. "Make sure that on a regular basis, usually annually, all your contracts are being reviewed to make sure that the service is still adequate, or to see if you can get it at a lower cost."
Make the most of complementary skill sets
Xavier de Lecaros-Aquise, co-founder of Girl Meets Dress, says having two founders helped his company cut back on costs. "When we started, ensuring we have a full team in place while bootstrapping was no easy feat," he says. "Becoming knowledgeable in so many different areas is challenging but it definitely helps to have two co-founders with complementary and different skill sets. This is a brilliant way to launch without needing to hire a full team on day one.
"If you can split the main areas of the business between you, then you can launch with minimal cost and test the product at market – which is the first step to seeing if there is demand."
Another area where he suggests you can cut down on costs is by going paperless or using a printer system like City Ink Express, which lets you buy ink in liquid form and in large quantities instead of cartridges.
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This content has been paid for and produced to a brief agreed with E.ON, whose brand it displays
