The ongoing cost of living crisis in the UK is hitting many people and businesses hard. No matter what size or type of small business you run, it’s inevitable that you’ve had to deal with rising costs. Regular expenses like energy, rates, rent, and even digital services have all increased.
It's natural to look at what business costs you can reduce when prices rise. But how can small businesses put practical strategies in place to help manage these rising costs?
Here are some top tips:
Know your outgoings
Keeping track of your business expenses is key. Regularly reviewing your bank statements can reveal subscriptions or services you might no longer need or could downgrade. For example, you might be paying for premium plans on platforms like Canva, Figma, or Mailchimp—are you utilising all the features you're paying for? Downgrading to a basic plan or finding free alternatives could save you money.
Similarly, digital marketing expenses can quickly add up. Are your campaigns on Google Ads, Facebook Ads, or LinkedIn Ads delivering a good return on investment? It might be time to reassess your strategy or explore more cost-effective channels.
Consider other recurring costs like subscriptions to software platforms—Shopify, QuickBooks, Xero, to name a few. Are there overlapping services you're paying for? Could consolidating platforms or switching to a more affordable option make a difference?
Shopping around for the best deals on your regular payments is also crucial. Could you switch to a new energy supplier offering a better rate? Many providers have special offers for new customers, but it's also worth contacting your current suppliers to see if they can match or beat competitors to keep your business.
Key to keeping on top of rising costs is using an expense management system in your business. There are plenty of online programmes available, such as Xero and QuickBooks. These platforms offer features that help you track expenses, manage receipts, and get a clear picture of your financial health. However, be careful to only pay for the level of plan that you need. Read the small print and be clear about any minimum contract periods or additional fees. Such systems can be very helpful—they enable you to scan your receipts directly into the system, making it easier to review your expenses in detail.
Make a realistic budget
When running a small business, it’s vital to understand the importance of having a realistic budget. Don’t set yourself up to fail by over or under-budgeting. By understanding the true costs in your business, you will be able to make changes to your expenditure as needed.
Look back at your previous expenditure over a few months to understand spending trends and identify costs that can be reduced. Then, review your actual expenditure against your budget regularly. This will help you understand where you have overspent or where you can make additional savings.
The key is being honest with yourself when setting a budget. Being realistic means you have figures that are accurate and that you can work with.
Work with your employees to help them understand the importance of robust cost control too. While you should have clearly defined spending procedures in place, it’s important that employees understand why it’s important to keep track of business expenditure.
Prepaid business expense cards
Using a prepaid business expense card can help you take even more control of rising costs. These cards provide accurate spending visibility, which in turn can help prevent overspending.
Prepaid business expense cards empower small businesses to track their expenses in real-time, ensuring that the reconciliation process is smooth and streamlined. Equals Money offers such a card, which could help you centralise your business spending and provide your team with a pre-approved budget available to spend. With an annual fee of just £50, it's a cost-effective solution compared to many platforms that charge monthly subscriptions.
It could be worth looking at prepaid business expense cards as an alternative to company credit cards. As the business owner, you can easily keep track of the costs you can afford while using a card. You can find more information about the Equals Money prepaid business expense card here.
Using a prepaid business card alongside implementing robust budgeting and reconciliation systems can ensure that you navigate the cost of living crisis successfully.
It's natural to look at what business costs you can reduce when prices rise. But how can small businesses put practical strategies in place to help manage these rising costs?
Here are some top tips:
Know your outgoings
Keeping track of your business expenses is key. Regularly reviewing your bank statements can reveal subscriptions or services you might no longer need or could downgrade. For example, you might be paying for premium plans on platforms like Canva, Figma, or Mailchimp—are you utilising all the features you're paying for? Downgrading to a basic plan or finding free alternatives could save you money.
Similarly, digital marketing expenses can quickly add up. Are your campaigns on Google Ads, Facebook Ads, or LinkedIn Ads delivering a good return on investment? It might be time to reassess your strategy or explore more cost-effective channels.
Consider other recurring costs like subscriptions to software platforms—Shopify, QuickBooks, Xero, to name a few. Are there overlapping services you're paying for? Could consolidating platforms or switching to a more affordable option make a difference?
Shopping around for the best deals on your regular payments is also crucial. Could you switch to a new energy supplier offering a better rate? Many providers have special offers for new customers, but it's also worth contacting your current suppliers to see if they can match or beat competitors to keep your business.
Key to keeping on top of rising costs is using an expense management system in your business. There are plenty of online programmes available, such as Xero and QuickBooks. These platforms offer features that help you track expenses, manage receipts, and get a clear picture of your financial health. However, be careful to only pay for the level of plan that you need. Read the small print and be clear about any minimum contract periods or additional fees. Such systems can be very helpful—they enable you to scan your receipts directly into the system, making it easier to review your expenses in detail.
Make a realistic budget
When running a small business, it’s vital to understand the importance of having a realistic budget. Don’t set yourself up to fail by over or under-budgeting. By understanding the true costs in your business, you will be able to make changes to your expenditure as needed.
Look back at your previous expenditure over a few months to understand spending trends and identify costs that can be reduced. Then, review your actual expenditure against your budget regularly. This will help you understand where you have overspent or where you can make additional savings.
The key is being honest with yourself when setting a budget. Being realistic means you have figures that are accurate and that you can work with.
Work with your employees to help them understand the importance of robust cost control too. While you should have clearly defined spending procedures in place, it’s important that employees understand why it’s important to keep track of business expenditure.
Prepaid business expense cards
Using a prepaid business expense card can help you take even more control of rising costs. These cards provide accurate spending visibility, which in turn can help prevent overspending.
Prepaid business expense cards empower small businesses to track their expenses in real-time, ensuring that the reconciliation process is smooth and streamlined. Equals Money offers such a card, which could help you centralise your business spending and provide your team with a pre-approved budget available to spend. With an annual fee of just £50, it's a cost-effective solution compared to many platforms that charge monthly subscriptions.
It could be worth looking at prepaid business expense cards as an alternative to company credit cards. As the business owner, you can easily keep track of the costs you can afford while using a card. You can find more information about the Equals Money prepaid business expense card here.
Using a prepaid business card alongside implementing robust budgeting and reconciliation systems can ensure that you navigate the cost of living crisis successfully.
