For any business to be successful, it’s vital to manage costs effectively. Reducing your monthly expenses can make the difference between positive or negative cashflow, a bulging bank account, or overwhelming debt leading to the failure of your business.
Most businesses are already at a disadvantage. Research by Bionic indicates that each year, businesses are overspending by £8.7bn on their energy, insurance, and telecoms services, averaging out to around £1,500 in excess for each business in the UK. For small business owners, this puts added pressure on finding options to get out of the red.
Joe Gallard, CEO of Reducer explains that the good news is that your core business services don’t have to be expensive, and there are easy and actionable ways to reduce the cost of your bills. To make the cost-reduction process simpler for you, he’s chosen three key ways you can begin to reduce your bills and have more cash in the bank.
1. Reduce your utility usage
Encouraging more efficient habits among your employees can have a significant impact in reducing your electricity, gas, and water bills.
Reducing electricity usage can be as simple as unplugging appliances and turning lights off when they’re not in use. On top of taking advantage of natural lighting, small investments in LED light bulbs and motion sensors can help to minimise electricity usage and, in turn, reduce your bill.
Similarly, turning off taps when not in use or installing water-efficient cisterns in toilets can reduce water spend. You may also want to think about changing water supplier or calling yours to see if they are happy to talk about your tariff, especially if usage levels have been down these last twelve months.
To reduce gas usage, a quick fix in the winter months is to turn down the thermostat by just one degree. The Energy Saving Trust reports that this will save a household £60 a year, meaning even bigger savings for commercial properties. In the longer term, draught proofing and insulating your office will help you to be more energy efficient, but will demand a larger investment that isn’t viable if you’re already struggling for cash.
2. Only pay for what you’re using
It seems obvious to only pay for what you’re using, but it’s easy to get caught overspending without realising it.
For your gas and electricity supply, you’ll want to make sure that you’re being charged based on meter readings to avoid paying in excess. Unless your supplier is receiving regular meter readings, you’ll be charged based on estimates for your property. So, any efforts to be energy efficient will be pointless in terms of saving money.
Manually submitting meter readings, or better yet having a smart meter send automatic readings for you, will ensure that your business is paying for no more energy than you’re actually using.
In regards to some other services, you may be subscribed to a contract with a minimum threshold. For example, you may be on an unlimited data plan for your broadband. If you’re not meeting this threshold and are instead using a quarter of your allowance, plan a move to a cheaper tariff to avoid wasting cash.
3. Switch to a cheaper supply
Switching suppliers is the best way to reduce the cost of your bills without affecting the level of service you can provide. With hundreds of suppliers, and 80% of businesses overspending on their energy bills alone, it’s highly likely there are savings to be found.
Typically, expensive bills can be traced back to out-of-contract rates on auto-renewed contracts. These are hiked prices dealt by suppliers when they auto-renew your existing deal. Failure to pay attention to your invoices can mean this goes unnoticed, leaving businesses paying up to quadruple the average market price for their energy.
In these cases, loyalty doesn’t pay and switching suppliers is the best way to make a concrete cut to the cost of your bills.
What Reducer is doing to help
Reducer is helping to empower small and medium businesses by equipping them with the tools needed to reduce their business costs in just a few clicks.
If you use cloud accounting such as Xero or QuickBooks, as well as a data entry app such as ReceiptBank or AutoEntry, then the Reducer app is able to use the data in your bills to source bespoke quotes for your business.
Once your account is connected, we’ll compare the prices you pay to over 150 suppliers and create a personalised cost savings report detailing our supplier recommendations. Choose which switches you’d like to take and Reducer will handle all the admin for you.
It’s quick, it’s easy, and it’s completely free.