Small businesses need to keep an especially close eye on their outgoings.
In an uncertain and potentially volatile marketplace, it's vital small and medium-sized enterprises (SMEs) focus on what they can control for themselves, particularly by managing their costs carefully. From office stationery to a broadband connection, SMEs too often pay over the odds, even when their owners and managers are confident bargain hunters in their personal lives. The good news, however, is that you can save a lot of money by shopping around.
Where you can save
Similarly, don't leave your firm's spare cash in a savings account that pays no interest. Many banks pay almost nothing on such accounts, but you can earn more than 1% annual interest with the market leaders, including Teachers and Market Harborough building societies; if your business has sizeable contingency funds or investment capital, that will add up. Corporate credit cards also often offer a real opportunity to make savings.
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Next, make it a priority to shop around on the utilities your business needs, including gas, electricity, telecoms and broadband services. Most of the leading price-comparison websites now carry best-buy data aimed at small businesses. You could also try a specialist SME aggregator, such as SmallBusinessPrices.co.ukor SmallBusiness.co.uk. The average SME reduces its energy costs by £1,150 a year when switching to a cheaper supplier, says comparison site Make It Cheaper.
Elsewhere, think about how much you're paying to manage the payments made by your customers. If you're currently buying merchant services from your bank, there's a good chance you're paying too much. By dealing directly with the global players that provide banks with debit- and credit-card processing including Worldpay, Global Payments and First Data you can often save money; Cardswitcher.co.uk can help you find the best deal. Similarly, don't assume the card terminals your bank hires out at high cost are good value. Challenger brands such as iZettle and Square are more cost-effective for many SMEs.
Finally, for other types of procurement, SMEs are increasingly teaming up, leveraging their joint purchasing power to secure better deals on all sorts of goods and services. For example, Huddlebuy sells SME membership for around £150 a year; in return, members can access a range of discounts the platform has sourced on an array of products. The Black Bear Group operates a buying group working on a similar basis.
David Prosser is a regular Money Week columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments.
David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor. He has won a number of awards, including the Harold Wincott Personal Finance Journalist of the Year, the Headline Money Journalist of the Year and the BIBA Journalist of the Year. He has also been a frequent contributor to broadcast news, providing expert advice and punditry on radio and television.
For the past ten years, David has worked as a freelance journalist, writing for a broad range of newspapers, magazines and online publications. He also writes a regular column for Forbes, and is a frequent contributor to both specialist and consumer publications.
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