Nowadays, increasing numbers of people are deciding to quit their nine to five and run their own businesses. Now, there are so many reasons behind this. First and foremost, many people may have grown tired of working for someone else. They want to be their own boss and generate their own fortune, rather than generating someone else’s on their behalf. Being your own boss also gives you a lot more flexibility within your working life. Sure, you’ll probably find yourself working long and hard hours to get things off the ground. But as your business gains momentum, establishes itself as a competitor in its field and is generating consistent sales, you can offer yourself more flexibility – choosing your own working hours. You can work from home at the start. You can choose how you brand your company. You don’t have to wear a uniform. You decide who you work and collaborate with. In short, you gain a lot of control over your career and income. But if you’re planning to run a successful business and to be profitable, you’re going to have to budget well. Running to a budget will ensure you never overspend and that you can keep things ticking over constantly. An important aspect of budgeting, as any good financial advisor will tell you, is cutting unnecessary costs or minimising costs within your business’ operations. So, to help you get started out in the right direction, here are a few areas you might want to focus on.
Commercial Premises Rent
Commercial premises quickly become a business essential when you start making sales, taking on staff and beginning to expand. Why? Well, you can only operate from your own home for so long. You may require to take on staff to complete various tasks that will keep your business ticking over and that will drive things forward – customer service staff to answer customer queries and complaints, a marketing team to advertise and promote your goods and services, tech teams to keep your website up and running… the list goes on. You’ll have to provide all of these people with a safe place to work. You’ll also likely want a professional space where you can meet with potential partners or collaborators too! Now, commercial premises often don’t come cheap. But the costs entailed to rent out a commercial space can be cut. Remember that you don’t have to be in a completely central location when you first start out. Central locations may have a high footfall, but the rent on them tends to be extortionate. Instead, look a little further out from absolutely central areas for lower cost options.
Every business requires energy to operate. Some require significantly more than others. While an office will get through a fair amount of electricity and gas – to heat and light the workspace and to keep all laptops, computers and other devices running to name just a few things. But a factory or manufacturing plant will generally get through a lot more. Regardless of how much energy you’re using for your business, it’s important to seek out the best energy tariff on the market. People tend to only focus on using energy comparison sites for their personal lives and in regards to the energy they pay for in their homes. But it’s just as important for businesses too! Finding a cheaper provider can significantly cut your outgoings! So, look around and see which energy providers will give you the best deal. You could save a lot more than you’d imagine! Where possible, look out for green and eco friendly energy providers too. Often their services are cheaper and you’ll be benefiting the planet! Remember, you can further cost energy costs by updating your electrical systems and ensuring they’re running as effectively and efficiently as possible!
Use an Accountant
Accountants really should be deemed an essential when it comes to running a business. Now, recommending paying for a service that you could technically carry out yourself may seem counterintuitive in an article on cutting business costs. But you’ll quickly find that accountants’ services are often worth their weight in gold. A good accountant will know all of the ins and outs of tax law and will know what you can and can’t claim expenses for. This can significantly reduce the costs of how much you fork out at the end of each tax year, making sure you’re only paying out what you need to pay out. It’s more than worth the investment for the savings you’ll likely make!
Invest in Insurance
Another investment that may seem non essential, but really is something you should consider taking out for long term financial protection is insurance. There are so many different types of insurance that your business can take out, and you may feel that you needn’t be paying so many monthly premiums. But all in all, you’ll be glad you took insurance out if you ever find a reason you have to claim on it. Good insurance policies could actually save your business from financial hardship or financial ruin if things don’t go to plan at any point and someone comes against you with a court case requesting compensation. Here are just a few types of insurance that your business could benefit from.
Commercial Property and Contents Insurance
The first type of insurance that you might want to take out is commercial property insurance. If you own the space your business is run in, you may need insurance on the property itself. But if you are simply renting the space, you will only need to insure the contents. Traditional brick and mortar stores, office spaces, storage spaces and any other tangible spaces you use should be covered. This way, if you experience vandalism, accidental fire and environmental disasters such as flooding, you will be able to make a claim which will cover the costs of repairs or replacements.
Indemnity insurance is also commonly referred to as “professional liability insurance” – they are both the same thing so you only need to take out one policy in this area. But what actually is indemnity insurance? Well, it’s essentially a policy that protects your business in cases where you may be accused or found to be at fault for things such as misjudgment, malpractice or errors, and omissions. Not all companies will require this, but it’s something that you really need if your business offers any sort of advice or expertise as a service. A good policy will cover court costs and the compensation that you may have to pay out.
Product Liability Insurance
If your business sells any products, you should ensure you take out product liability insurance. This is an insurance policy that protects your business should any products you sell prove detrimental to members of the public who come into contact with them. This can include protecting you against the cost of any claims relating to issues such as personal injury or damage to property.
Your business probably uses a whole host of tech products and gadgets on a day to day basis. Computers, laptops, tablets, smartphones… the list goes on. So, you need to protect all of these items with gadget insurance. This way, if a drink is spilt over a device, a device is dropped and broken, or any other issues occur, the device can be repaired or replaced quickly, minimising interruption to your business’ operations at a much cheaper cost to yu than you would’ve had to fork out if you were repairing or replacing things yourself.
Sometimes, you need tasks completed that fall outside the realms of your personal skill set, or outside of the realm of expertise of any employees you may have. If you’re going to need this work carried out on a regular basis, it makes sense to employ a permanent member of staff to complete it. But if it’s likely to be a one off task or one that you can’t commit to providing regular work for, you could be much better off outsourcing the work. When you outsource work, you pass it on to freelancers or agencies who can complete it without you having to employ the staff completing the work. This is low commitment and will keep costs lower than taking on a permanent member of staff who won’t have much to do on a daily basis.
These, of course, are just a few different areas where you can cut running costs of your business, or where you can protect yourself from future incurred costs or potential incurred costs. Protecting your business’ profits and finances is extremely important, so never underestimate the value of following any of the steps outlined above. They really can make all the difference! Hopefully, you’ll be able to implement a few changes at some point in the near future to benefit from them as much as possible!