MONEY SAVING TIPS FOR SMALL BUSINESSES
Worried owners of small businesses including retailers, hairdressers and builders estimate that, despite lockdown now being eased, they have an average of just nine weeks left before they will be forced to stop trading. So, what can small business owners do to save money and continue trading?
New research by Smart Energy GB, which surveyed the owners of 1,000 micro businesses (firms with less than 10 employees) reveals the devastating financial effects of the pandemic, as almost half of owners have considered closing their business altogether. As well as this, over a third haven’t paid themselves in order to cope with the crisis.
To help support small businesses during this difficult time, Small Business Britain is offering practical money saving tips to small business owners. We have gathered our top six pieces of advice below, including getting a smart meter installed to help you save energy.
1. Save energy, save money
Energy usage is one of the expenses small businesses are most likely to estimate. A great way to understand how much energy you’re using, identify ways to reduce your consumption and therefore save money, is by getting a smart meter installed.
Contact your energy supplier to find out if your business is eligible for an installation.
2. Forecast cash flowTo save money, you first need to know where it’s going and when it’s coming in. While there’s some sophisticated cash flow software out there, sitting down with a simple spreadsheet to plot different financial scenarios can be just as effective too.
3. Access financial supportIf you do have a shortfall to meet, there’s lots of financial support out there including Bounce Back Loans and Business Interruption Loans. The Government’s new Job Retention Bonus might help make it more affordable to retain staff. Just remember that any extra debt you take on will need to be paid back.
4. Cut costsTwo thirds of small businesses have changed their business model as a result of the crisis. Reshaping a business brings a lot of opportunities, but sometimes extra costs too. It is important to interrogate all of your spending to see if there are options to save – even if it’s how much you spend on milk!
5. Negotiate openlyIf you are really struggling, don’t suffer in silence. Open up a conversation with everyone you can to see if it’s possible to arrange discounts, or more manageable payment terms. Speak to your accountant, or HMRC, about taking up the current offers to defer tax payments like VAT to aid cashflow.
6. Find support groups
The pandemic has been overwhelming for many businesses, so it’s important to make sure you have the right support. Many business schools offer free support through their networks, particularly those belonging to the Small Business Charter. There are also regular, free online events through Small Business Britain’s Facebook channels.
What are the benefits of smart meters for my small business?
Smart meters can bring many benefits to small businesses, such as:
- they send your energy readings directly to your supplier, meaning accurate bills and an end to manual meter readings.
- they give you the opportunity to monitor how much energy you're using, in pounds and pence, every day, week and month. So you can spot the activities that cost the most and take action to save money.
Can I get a smart meter if my business is in a rented premises?
Yes. If you pay the energy bills you can make the decision about whether to get a smart meter. If your landlord pays your energy bills, speak with them about getting a smart meter for your building.