One of the biggest challenges to running a successful business is how to manage your money. Hidden expenses make a difference to a company’s bottom line, and have the potential to determine whether a business sinks or swims.
We spoke to a selection of small business owners and industry experts, who gave their advice on how to make sure you aren’t paying more than they need to, and where you can make quick and easy savings.
Home or remote working
Businesses providing services, particularly online, can make the most of working remotely to save on overheads. If your enterprise can exist without premises, then the best course of action could be to avoid spending money on a high rent that could be better used in other departments. Danielle Pinnington, managing director at Shoppercentric, chose remote working when she started her business.
“I decided we would remote work until we had momentum for an office. In the end, remote working has been a huge selling point when looking for more staff, allowing us to draw on people with established families and therefore fixed bases,” she says. “What felt like a cost saving up front has become a core benefit for the team.”
Home working can also bring benefits for small businesses, although there can be potential downsides. Tom Askew, founder of high-end audio amplifier supplier Askewlabs, runs his business from home and, while he benefits financially, it can come at a different kind of cost.
“There’s a big saving to be made on property rent and utility sharing. But there’s a huge downside to this – it takes a lot of control to implement a work/home balance when there’s no physical difference,” he explains.
Make the most of what you have
Some businesses have no choice but to have physical premises. Such is the case for Wynwood Art District cafe in Walthamstow, London, which opened its doors in 2014. While rent is an unavoidable cost for cafes or restaurants, there are other ways to economise. Wynwood owner Stella Taliadoros made the most of what she already had at her disposal.
She says: “We mixed the old with the new – my dad is an electrician so we got practically all our light fittings for free as he had a load spare. We used old furniture that we had and, if we did buy, we looked on Gumtree or eBay. Some stuff was even free – it’s a good starting point and you can always add or replace as time goes on.”
Marketing and PR
Fittings and furnishings are not the only way Wynwood has saved money. One of the easiest ways to economise on marketing and PR is to use social media, something Wynwood made sure to do even before opening their doors.
“Me and my sister are quite good with social media and did all our marketing online,” she says. “We started our account before the shop was open and built up a buzz. With some businesses flyering or posting ads will work but, if used properly, social media is the cheapest and most effective way of getting noticed.”
Much as social media is a useful tool to avoid expensive PR, online marketplaces can also help with exposure, as well as boosting sales.
Askewlabs does much of its business through eBay. “The positives of eBay are that it’s incredibly easy to use, and the exposure that items get versus the cost of listing and final fee is pretty reasonable,” says Askew.
Networking
Catherine Shuttleworth, CEO at shopper and retail marketing agency Savvy, says networking can be key to keeping costs down.
“Look for a way to access recommended experts that you can trust – through your local chamber of commerce, LinkedIn or research for local networking groups on social media,” she says. “You’ll save yourself a lot of time and money. Also don’t be afraid to use your gut instinct – when choosing partners, suppliers and also employees.”
Small firms shouldn’t be afraid of asking for help – and Taliadoros of Wynwood has made the most of family expertise.
“We are a family business and between us have over 15 years experience working in this field. This does help as a startup business and we all pitch in,” she says. “We make the majority of the food and only have a couple of suppliers. This saves money and is one of the key features of our familyrun business. If we need an extra hand, my mum or my dad are always around to help out.”
Outsourcing
Some businesses try to cut back on costs by taking on as much of the work as they can themselves, seeing outsourcing of tasks such as accounting as an expense they’d rather not cover. However, in the experience of George Blizzard of the PR Network, taking on too much at the start can lead to bigger costs further down the line.
“I think most businesses in the startup phase try to keep investment to a minimum and do as much as they can themselves,” he says.
“This is fraught with problems; not only do you waste valuable time you could have spent on building the business, but you often end up paying more to get someone in to fix the problem. We thought we could build the business, handle all of our clients and do our own accounts, but this cost us more in the long run as we had to get an expert in to sort out the mess we created.”
Content on this page is paid for and produced to a brief agreed with Simply Business, the UK’s biggest business and landlord insurance provider, and sponsor of the supporting business growth hub.
