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Surprising ways to reduce your business costs
Read time: 5 mins Added date: 26/01/2024
As inflationary pressures continue, business owners may need imagination and inspiration as well as determination to keep costs at a manageable level. Intelligent cost control is about reducing waste as much as spending less.
You may be surprised to see the amount of wastage in areas such as office costs. Here are some areas you may want to consider when identifying potential cost reductions.
Heating, air-con and lighting
More than half (55%) of an average office energy bill goes on heating, air-con and lighting. Many office lights are movement activated but you could reduce time lags. Shortening from ten to five minutes could have a sizeable effect.
It may be possible to save in heating bills by identifying unused areas. If you have several breakout rooms, which are rarely all used at the same time, perhaps think about a smarter use of the space. It may be possible to shut off some of the space in school holiday time or other holiday periods.
Save more by adjusting ambient temperatures a notch or two, and fitting energy-efficient LED lighting. You could also consider hot-desking which would reduce the amount of space that has to be heated or cooled, and lit.
It may be possible to make the lit zones smaller and use more natural light. Exposure to vitamin D in sunlight may alleviate low mood. According to Healthline, the health information website: “Research has shown that vitamin D might play an important role in regulating mood and decreasing the risk of depression.” If that raises job satisfaction, it follows that rates of achievement and productivity will improve.
Turning off always-on tech
Many offices have televisions mounted in the wall or pillars. It’s useful in some lines of business just as some people like to have two computer screens. Research by British Gas, the energy supplier, suggests individuals could save £147 a year turning off not-in-use electronic devices.
Kettles and coolers
Kettles are often overfilled so a boiling water tap might save money and aid sustainability programmes. Since boiling water taps usually serve chilled water too, you may find that traditional large bottle water coolers fall redundant.
Being imaginative, and doing thorough research, is vital. You might save on refrigeration and vending machine costs by sourcing fresh milk and healthy snacks for communal consumption. This could also have the added benefit of raising the feel-good factor among employees.
Travel and training
Business travel budgets can be streamlined, thereby lowering costs and emissions. Emerging practices such as use of car clubs – very short-term vehicle rentals – may be a cheaper and more sustainable option too. Depending on the type of business, the upfront cost and depreciation of buying a van, say, may well be more than hiring by the hour.
As video calls have become part of everyday working practices, it could also be worth investing a little in online presentation training for staff to close the gap and make travel less necessary. Taken with the lowered impact on emissions, the investment could reap double rewards.
Government help
The government are continually developing ways to support businesses and help them grow. In the 2023 spring statement, the government introduced a number of initiatives, including:
- The ability for companies to permanently claim 100% of its capital allowances on qualifying main-rate plant and machinery investments, meaning that for every pound invested its taxes are cut by up to 25p.
- A rollover of the 75% relief for 230,000 properties and a freeze to the small business multiplier, which will protect around 90% of eligible ratepayers up to a maximum cash cap of £110,000 for a fourth consecutive year.
Businesses can benefit from other schemes such as the Cycle to Work Scheme. Offering schemes like these will benefit employees while potentially allowing businesses to replace other expensive schemes such as company vehicles.
Fair pay
The reality of inflation, and the importance of promoting empathetic workplace practices means it is appropriate and socially responsible to make allowances for employees facing their own costs of living pressures.
Sensitive issues such as wages are best tackled with transparency and fairness. If input prices are going up, give the employees some idea of the scale, to temper the impact on employees accordingly. In the name of social responsibility – not to mention teamwork and top line sales – it may be right for the business to take a short-term hit on profit margins. If less palatable measures are required – wage limitations or job cuts, perhaps – it’s important to ensure that the measures are proportionate and fairly distributed across the employment base.
Regular reviews
Sound businesses review costs on a regular basis but rising rates of inflation means special effort is required right now. The best results will come by keeping a keen year-round eye on costs, savings, and ways to give your business long-term, robust, sustainable prospects.
Managing business costs and uncertainty
Businesses are facing unprecedented challenges right now and meeting financial obligations can be hard. Support is available should you need it.
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