DURING a time of economic uncertainty and high operating costs, access to insight and expertise is more important than ever to smaller businesses.
The British Business Bank has created resources for smaller businesses and start-ups which contains practical and actionable guidance for smaller businesses on what they can do to reduce their costs, boost their profitability, and increase their resilience. Here are its top tips:
1 Plan your finances
A financial health-check is essential to success. By staying on top of your finances, you can build business resilience.
Financial forecasting can help you see how much income is needed to cover future costs and make a profit and help you spot where costs may be higher than income. Maintaining a good cashflow will also ensure your business has enough money for overheads.
2 Explore external funding
External funding is, in many cases, essential to enable growth. However, this needs to be carefully considered to avoid running into repayment problems. From debt financing to grants and support to overdrafts, there are many different types of finance that could unlock growth.
Always speak to an independent financial advisor before you make a decision, so they can help you find an option that suits you and your business.
3 Foster supplier relationships
Most businesses rely on working with suppliers, so the stronger these are the better. Strong supplier relationships may help you to bring down costs, ensure availability and avoid delays.
Creating a shortlist of suppliers, briefing them clearly, and negotiating up front will mean you end up with a supplier suited to your requirements.
4 Energy use solutions
We know that energy use is a concern for everyone. From saving the environment to saving money, it’s a key consideration when figuring out the cost of starting and running your business.
As you look to cut down, follow these four simple steps. First, assess your energy use to figure out how much your business uses and where. Then, look for any quick win savings. Next, it’s back to the supply chain. Shop around or see if you can negotiate a better deal with your existing supplier. Finally, consider any viable renewable or alternative energy sources.
5 Modernise with technology
Implementing the right technology can lower costs, save money, and improve effectiveness.
These don’t need to cost a fortune and can be as simple as switching to cloud-based software designed for hybrid working and business collaboration to free alternatives to business phone lines and using on-demand business support services.
6 Building your team
Costs can quickly mount when hiring staff, but simple steps can ensure you reduce those costs. This starts with being specific with your job ad, which avoids unsuitable candidates applying.
You can also use your networks or ask trusted contacts if they know anyone suitable. Offering perks and tailoring the work to diverse needs can widen your talent pool. If you use a recruitment agency, check if you can get a discount on the fee.
7 Take care of your mental health
It’s important to prioritise your health. Taking time away from work to recharge will not only make you feel better but will better enable you to put the right amount of energy into growing your venture.
The British Business Bank’s ‘Guide to building business resilience’ can be downloaded at www.british-business-bank.co.uk/finance-hub/wp-content/uploads/2023/01/FINAL_Guide_to_building_business_resilience.pdf
The Start Up Loan’s ‘Guide to business resilience’ can be downloaded at www.startuploans.co.uk/business-advice/start-up-loans-guide-to-business-resilience/
:: Susan Nightingale is UK network director for Northern Ireland at the British Business Bank
