What a difference a budget season makes! The Autumn budget last November was hailed by many as being positive for small businesses with a commitment to national productivity growth, funding for start-ups, money for local enterprise partnerships and spending on infrastructure all announced. Fast forward less than four months and we saw controversy with threatened tax rises (later withdrawn by the government) being laid at the door of the self-employed. Add to that the revaluation of business rates (some of which has been mitigated by support announced in the budget) and changes brought about by Brexit and it is a worrying time financially for many of Britain’s entrepreneurs.
So, as budget measures (and Chancellors) will come and go, we focus on what can be done now and in the future to save your business money whatever changes come along…
Include a financial forecast in your business plan
The three main elements to include are sales, costs and cash-flow. Take into account seasonal and historical variables that can lead to peaks and falls in sales – this will help you structure your cash-flow. It is useful to differentiate between fixed costs (i.e., rent and payroll) and variable costs (i.e., advertising, promotional activities). Listing these will help you to focus in on what can be switched or re-negotiated to bring about savings for your business.
Make sure you are paid on time
According to the payments processing company, Bacs there is more than £26 billion in late payments outstanding to smaller businesses. Chasing payments, increased paperwork and fees incurred whilst waiting for customers to pay can all pile stress on SMEs and cost money! Have a clear strategy in place for chasing payments and be clear about your expectations with customers from day one. Some businesses choose to use an invoice finance company to help with cash-flow.
Compare the best deals
Price comparison sites exist to save you time and money whether you’re searching for a deal on energy costs, insurance or loans for your business. Re-assessing the way you spend money on your business can help lead to savings in the long-term. Stay on top of your contracts and let comparison sites do the hard work for you. Even small savings can add up and help soften the blow of external financial pressures.
There are certain services and utilities that every business needs to function, however, how and from whom you choose to purchase these should be up for negotiation if you are to save money! For example, failure to switch to cheaper energy providers has cost the UK’s SMEs a staggering £2.4 billion over the past five years according to research by Love Energy Savings. Know when your contract is due to expire, take the time to compare and consider using a broker to arrange it for you.