Save money on accountancy fees
Before you can cut your costs you need to understand your finances. Up until now, you may have been just bundling your paperwork into an envelope and sending it off to your accountant, crossing your fingers that you're in profit. But, obviously, that’s not a great idea.
Use online bookkeeping software to enter and track your finances electronically in real-time. Once you're doing your bookkeeping online, you can then use a certified accountant to process your accounts quicker, directly from your online records. This way they don’t have to wade through a messy stack of paperwork, meaning their fees will be lower.
Get a better price from suppliers
Every year I hunt around to see if there is a better car insurance deal available. There's no reason not to apply the same principle to everything your business spends its money on.
First, contact your suppliers’ competitors to see if they can offer you a better deal for the same goods or services. Then speak to your existing suppliers and try to negotiate a better deal from them using your conversations with their competitors as leverage. If no one budges on price, you've not lost anything by trying. On the other hand, the upside is that you could instantly increase your profit margin.
Reduce your office costs
Hold off paying for office space for as long as you can. If your business doesn't need physical premises, you can operate in a virtual office from home instead, using mail and call forwarding services.
For meetings, join the 'cappuccino commerce' generation and use Wi-Fi connected coffee shops, or hire a room/desk space on a pay-as-you-go basis using drop-in business centres such as Regus. Or carry out an online search for a “virtual office" in your town to see what’s available.
If working from home isn't an option, look for local start-up hubs offering free communal workspaces. Once you have a few staff working remotely, the team can stay organised using Trello, a free online collaboration tool to help track tasks and plan project activities.
Claim use of home as office expenses
If you’re working from home, you can claim expenses that contribute to your utility bill costs and mortgage or rent. Paying yourself expenses for “use of home as an office” can reduce your tax bill. This article provides guidance on how to approach calculating your entitlement.
Avoid capital expenditure
Avoid buying expensive things outright, because it ties up your working capital. Consider renting or leasing expensive items, such as a company vehicle, machinery, high-end camera and audio or video equipment.