Blog Layout

Blogs

Cutting costs in 2022

When cutting costs, ask yourself if all your business expenses are necessary and look at possible alternatives. The best way to do this is by looking at your Profit & Loss every month to make sure your budget is in line with your spending. That way, you can determine what costs to cut if needed.

It’s important to budget to make sure you know what you can spend. Your expenses will likely end up being a mix of fixed overhead costs (such as rent) along with variable costs (such as stock), and can be very straightforward. However, be prepared to make changes if your plans and circumstances change.
It’s also a good idea to do some forecasting to determine what your expected sales could be. You can do this by taking into account the sales figures of previous periods, customer demand changes, new competition entering the market, as well as your own marketing plan.
Now that you know a little bit more about the importance of Budgeting & Forecasting, here’s some tips for cutting costs in 2022:

1) Opt for energy-saving options

Switching to energy-efficient light bulbs, such as LED options, can help reduce usage and waste, and they also last longer. Making sure to turn off equipment and lights when they are not being used (or opting for occupancy sensors and timers) can also help with those energy bills!

2) Reduce office space


If your business can work remotely, you can cut down the amount of office space needed. You could also use a shared workspace, which is usually cheaper than an independent property. 


Going paperless can also help you reduce ink and paper costs, as well as save shelf and storage space.


3) Review service agreements regularly


If your business doesn't handle many calls, a VOIP (Voice Over Internet Protocol) phone can help reduce costs whilst still having a UK landline number. 


If your business doesn't take many card payments, then you might be wasting money on expensive credit card terminal agreements, as processing fees can be very expensive.. Make sure you're only using the payment options your business needs, and where possible, opt for cheaper card machines that still give you that flexibility you need.


You can also cancel any unnecessary subscriptions that you're not actively using, and compare the services you choose for the best deal.


4) Save water (and money)


Other than switching to cheaper suppliers, better habits can help cut costs by reducing usage. Turn off taps when not in use, check for leaks if you suspect one, and install a cistern in toilets to reduce usage when flushing.

5) Reconsider your employee perks


If employees aren’t fully using the benefits you offer, it makes sense to eliminate these and use the budget elsewhere, as reducing employee perks can save money without reducing the quality of your goods or services. 


If feasible, replace perks instead of completely getting rid of them - a bonus day off or work-from-home day are cost-friendly incentives. You can also reduce the scope of the perks. For example, instead of a staff lunch, you could have a coffee morning instead.


6) Outsource processes


To reduce staff costs, you could choose to outsource operations instead. For example, many businesses will outsource their accounting instead of paying a salary to an in-house accountant, and work with a marketing agency instead of having a full-time marketer.


Outsourcing can be much cheaper than paying a wage to full-time employees, and it can still yield reliable results.


If you are looking to outsource your bookkeeping, get in touch! We offer a free 30-minute phone consultation. You can call us on: 07762657277.

Share by: