Cost-cutting for small businesses: six quick wins

Cutting costs without cutting corners

Every business goes through a phase where costs need to come down. The trick is to cut the right things — the waste — without cutting the things that generate your revenue or make your business harder to run.

Here are six quick wins we see work for small businesses time and again.

1. Audit your subscriptions

It’s remarkable how many businesses are paying for software, storage and services they no longer use — or that have duplicated each other as teams have grown. Go through your bank statements and card payments for the last 12 months and cancel anything unused or duplicated. Most people find at least one recurring charge they’d forgotten about.

2. Review your software stack

For the software you do keep, check you’re on the right plan. Are you paying for seats that are never used? Would an annual plan (billed upfront) be cheaper than monthly? Is there a small-business tier that does everything you need for less?

3. Make sure you’re claiming what you’re owed

This isn’t a cut, it’s a recovery. It includes:

• R&D tax relief for genuine innovation
• The Employment Allowance, if you’re an employer
• Business rates relief, if you occupy premises
• Making sure business purchases go through the business, so the cost is tax-deductible rather than paid from taxed personal income

4. Negotiate your suppliers

The best time to negotiate is when a contract is coming up for renewal — or when you’ve been a customer for a while. A single call can often secure a better rate on broadband, insurance, banking or utilities. It costs nothing to ask.

5. Look at your financing

Are you paying credit card interest? On an expensive overdraft? If your business is healthy, refinancing into a cheaper facility — or better, using free terms — can save meaningful money. Conversely, cash sitting idle in a low-interest account could be earning more.

6. Check your accounting fees and VAT position

Accountancy fees are an expense like any other — and if you’re paying for services you don’t use, that’s money leaving the business. And if your business has grown, check whether your VAT scheme is still the most efficient one for you (see our article on VAT registration).

A note of caution

Cost-cutting can go too far. Cutting marketing, training or the tools your team relies on can cost far more than it saves. The goal is to remove waste, not to starve the business.

If you’d like a second set of eyes on your costs and tax position, book a free consultation.