close menu

6 simple ways for SMEs to cut costs

by 1st Contact | Feb 05, 2015
  • Cost management for small businesses and contractors is vital, but knowing where to cut down without negatively affecting the quality of your products/services or the efficiency of your business is not particularly easy.
  • Accounting

    Here are six simple ways to improve your profit margins by cutting down costs.

    1. Office costs

    Examine ways to reduce wastage: switch off lights and equipment when not in use, cancel any unnecessary subscriptions and services and look for ways to cut costs on supplies.

    Even a small saving on stationery and other supplies can add up to a substantial amount every year.

    Buying in bulk – whether coffee and sugar or post-it notes – can also add to your savings.

    2. Office space

    Are you utilising all the space you’re paying for? If not, you might want to consider downscaling or sub-letting part of the premises. If you rent expensive office space, but don’t ever see clients there, you may want to consider renting elsewhere.

    3. Staff

    Review each function within the company and decide if they require full-time employees; roles can be outsourced or performed part-time. If an employee leaves the company, first review the role and see if the work can be split between other employees.

    Use freelancers where possible to avoid the overheads. You can also look at arrangements where staff work less hours for less pay, but have more time to pursue their own part-time business interests.

    4. Travel

    Instead of traveling to every meeting or briefing, consider using Skype and other virtual platforms in order to save on costs. A study carried out by Ashridge Business School, Zipcar and StartUp Britain showed that vehicles owned by small businesses sit idle 63% of the week.

    This waste could also be avoided with a share scheme, whereby two or more vehicles are shared between businesses.

    5. Trade exchanges

    One way to avoid unnecessary cash outlays is to have trade exchanges that are relevant and mutually beneficial. For instance, you could give IT support to a supplier in exchange for free products or a substantial discount.

    6. Efficient accounting

    The added support of good accounting services will ensure that your books are balanced, that you don’t overpay on tax and that you never lose money paying late filing penalties.

    What are your favourite tips to cut down on operating expenses?

    • container-ship-and-plane
      By sea, air or road: Which method of shipment is right for you?
      Sep 14, 2017  |  by Kobus Van den Bergh
    • atm-hand-cards-bank
      How to open a bank account in the UK
      Sep 14, 2017  |  by Leanne Shrosbree
    • happy-man-with-pounds
      Recently stopped working? You might have a tax refund waiting for you
      Sep 13, 2017  |  by Kobus Van den Bergh
    • london-big-ben-royal-guard-pattern
      How to ace your UK citizenship tests
      Aug 23, 2017  |  by John Dunn
    • big-ben-london
      Start your life in the UK the stress-free way
      Aug 21, 2017  |  by Leanne Shrosbree
    • woman-alarm-clock-scream
      Applying for an emergency UK visa in South Africa
      Aug 17, 2017  |  by John Dunn
    • Three friends having breakfast
      Roommates, budget and location: Your guide to finding accommodation in the UK
      Aug 11, 2017  |  by Leanne Shrosbree
    • Group of friends having drinks
      5 ways to meet new people in London
      Aug 07, 2017  |  by Leanne Shrosbree
    • SA and UK flag
      How many South Africans were granted British citizenship last year?
      Aug 03, 2017  |  by John Dunn
    • Puppy
      No pet left behind: Bring your furry friends with you to the UK
      Jul 28, 2017  |  by Leanne Shrosbree

    Do you like cookies? We do, read why.