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Cost-saving tips for start-ups

Money Saving Ideas for New Businesses

Launching a new business in any industry costs money. You’ll need a strong financial plan and budget that covers everything from equipment, inventory, products, and workspace to tax, insurance, and wages. Then there are marketing, advertising, and operational costs to consider that can quickly add up.

How much money you need to start a business in the UK depends on a plethora of factors, such as the type of company, your location, the current market climate, and much more. Stringent research and thorough financial planning are vital to demonstrate you’ve got a viable business model but it’s always nice to consider cost-saving ideas for companies.

Anywhere you can cut back on spending should help boost the finances of your business and increase profits. This is even more important when you’re a new business and every penny counts. Run a more cost-effective start-up with these money saving ideas for companies at the beginning of their journey.

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Budget carefully

Good budgeting is the bedrock of any successful business. It’s especially important for small and new companies to provide an overview of your finances, balance income and outgoings, and identify areas where you need to cut back and save. Good planning and budgeting can help your new business minimise expenditure.

There are five key steps to budgeting carefully as a new business:

  1. Estimate expenses – start by adding in all your outgoings including fixed, variable, and one-off costs. This could be for the full year, a quarter, or a month. It should provide a good idea of how much you need to break even.
  2. Contrast with your income – include the amount your new business expects to earn. Compare this to your predicted expenses to see if you can cover the costs and if not, find ways to cut back on expenditure. Your income should be more to demonstrate the viability of your business.
  3. Track your finances – project whether you’ll make a profit or loss. Then keep a daily, weekly, and/or monthly tracker of your sending and income to ensure your company stays on track. Identify any issues as they arise so you can control them to keep within your budget.
  4. Add an emergency fund – set aside some savings in a separate pot or account and send a percentage of your income into these savings to create an emergency fund. It could help if you have an unforeseen issue such as sudden building work, a lost client, or staff issues due to illness.
  5. Review the budget – regularly review your budget to highlight any problems and fix them to avoid losing money. Even if your profits exceed expectations you can adjust your budget to make the money work better for your business.

Apply for grants to 
start a new business

There are various grants for starting a business in the UK available to new companies. These can help with funding and start-up costs to save money at the beginning of your journey, while there are also grants for encouraging business growth for established firms. Most grants are awarded to help launch new businesses.

You don’t have to pay back any money you receive from grants to start a new business, unlike a loan. That’s why they’re so attractive for start-ups (but also quite competitive). Different bodies and schemes run grants for starting a business in the UK so each one has its own specific terms you must meet to be in with a chance of applying successfully.

How much you may receive and what you can put the money towards also varies between different business grants. Having a strong business plan and a clear idea of where and how you’ll use the money to grow your company is vital to stand a chance of securing any grant.

Visit the UK government website to explore any currently available grants to start a new business.

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Outsource work

Successful business owners know when to delegate tasks to others. You can’t do everything yourself and it’s often more cost-effective to pay an expert to do work they’re experienced in rather than have a go yourself. The costs to fix any mistakes and the valuable time saved to focus on other important business will be worth it.

Hiring employees can be expensive though when paying them an annual salary. If your budget plan won’t stretch to cover a full wage then consider outsourcing work. Using freelancers, agencies, and contractors saves money. You pay for a specific amount of time, don’t have to pay for any training or the other costs of hiring a full-time employee, and you get expert work.

Buy in bulk

It’s almost always cheaper to buy anything in bulk, so your new business should do this where possible. Bulk buying can save hundreds and thousands of pounds every month whether it’s paper for the office printer, cardboard boxes to package your products, or bottles of wine for a restaurant.

Seek suppliers that offer the best rates for any food, equipment, and other items that your business uses regularly. The more your order the better price you’re likely to get. Arranging regular deliveries of items in bulk cuts costs and makes budgeting easier as you should have a clear idea of how much you spend on such things every week or month.

Reduce, reuse, repair, and recycle

Reducing waste is an easy way to minimise consumption and costs for your new business. There are all sorts of things you can do to reduce the consumption of products, goods, and materials. Switch to reusable things, such as having glasses and mugs in your kitchen or coffee shop rather than disposable plastic cups.

Repairing broken electronics and other items rather than instantly replacing and buying new ones is cheaper and benefits the environment. Recycling rubbish rather than throwing everything away with general waste saves money too, as your business will pay less landfill tax for its disposal. Review where your company can reduce its consumption and waste of all materials.

Explore our recycling services
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Use free tools

There are thousands of free online tools out there that can make many business processes a lot cheaper. These range from logo makers to get your organisation’s branding up and running quickly to communication apps such as Slack to keep your team engaged and even free accounting software.

Some tools and apps simply offer a free trial for a limited period while others are completely free to use. Search around online to find the best tools, software, and apps that suit your company’s needs best without paying a penny. However, if you find some tools aren’t quite up to scratch then you might have to pay for a better service.

Review and renegotiate

Negotiating is a great way to cut the running costs for your business. Plenty of start-ups are cautious about negotiating on price either for fear of missing out or due to inexperience. It could be with a supplier, renting workspace, offering salaries to staff, or working with vendors at an event.

Research the average price for whatever it is you need for a good starting price. Accepting the initial offer could mean you pay over the odds, especially if the seller realises you’re new and tries to take advantage. However, low-balling could mean you miss out – it’s about getting the right balance.

Many vendors will expect some negotiations so may set their prices higher at the start. After using a service for a while it’s important to review your costs and if you can find cheaper ones elsewhere consider switching. Let your current partner or supplier know this and they might cut their prices, as most would prefer to keep current clients rather than find new ones.

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Cut your waste collection costs

Any new business must legally meet its waste obligations by using licensed waste carriers to remove rubbish from their premises. Simply throwing everything in one general waste bin might seem like a good idea but it’s terrible for the environment and can be more expensive. Lots of general waste goes to landfill so you’ll pay a high landfill tax.

Switching to recycling bins – even if you use a few – should be cheaper than having one general waste bin. Plus, you can reduce the number of collections you need. Separating materials into different recycling bins helps the environment and reduces how much general waste you produce, minimising the amount of landfill tax you pay.

Get a free quote and free bins for waste removal anywhere in the UK with Business Waste – you only pay for collections. Call 0800 211 8390 or contact us online today for a free no no-obligation quote bespoke to your new company’s needs. One of our experts can advise on a cost-effective solution.

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