- Utility and communications bills can have an impact on profit margin
- Make sure you open your renewal letter to avoid rate rises if the contract rolls over
- Don’t pay more than you need to for office space. There are other options to consider, such as serviced offices
Making more money out of your business isn’t just about increasing sales. Taking control of your overheads can help improve your profit margins. Operating costs shouldn’t be dragging your financial returns down.
Many small business owners don’t know how to get the best price for their gas and electricity contracts. Jonathan Elliott is the Managing Director of Make It Cheaper, a call centre that helps small businesses get the best deal on their utilities.
“An energy contract will run for a certain period of time,” he says. “The problem is that almost all of these are ‘evergreen’ – it will automatically renew itself unless you decide otherwise.”
Typically, a deal with a new supplier will be at very competitive rates. “However, about 130 days before the contract ends, the customer will receive a letter that might not look very important – our research shows that 79% of people aren’t even aware that they’ve received it,” Jonathan explains. “It will contain prices for the next year or two and your contract will automatically ‘roll over’ onto the renewal rates if you don’t terminate it.”
More simply, you can save on gas and electricity by managing your energy use. Make sure lights and computers are turned off at night, or place electrical equipment on timers to make sure.
Gas and electricity aren’t the only overheads you’ll have to think about, but the same money-saving techniques still apply across the board. For telephone and broadband services, you’ll generally get a better deal by changing supplier. Your business might even be suited to a free online phone service such as Skype.
Away from bills, a good rule of thumb is to make sure you’re not paying for anything you don’t need, or paying too much for the necessities. Recycled office furniture, for example, is generally cheaper and some energy-efficient materials and products qualify for reduced rates of VAT.
Finding the office space that suits your business will help, too. Not every small business needs a conventional office and there are options that can save you money. Serviced offices, for example, let you only pay for the space you use and are charged through a monthly fee that includes things such as utilities and a receptionist.