Small Business Cost Cutting Ideas

By | June 30, 2018

This article is a summary of the small business cost cutting ideas that have been included throughout our Admin Advice website. Much of the content may also be of benefit to those working or intending to work in an office environment. The aim of Admin Advice is to be your first reference for matters of business administration.   small-business-cost-cutting-ideas

Every Business Involves Administration Duties

Starting out in business involves organizing bookkeeping, arranging for accounts to be prepared, preparation of a website and all the hosting, backups, security and marketing (SEO) necessities. Other requirements might also include a Business Plan, Cash Flow forecasts, Budgeting, Monthly Accounts and a Promotional/Marketing Plan.

The business owner’s expertise will be in the products and services the business has to offer, building a customer base and growing the business. The administration side is a necessary distraction – so let’s consider some options with the priority to maximize our efficiency.

Bookkeeping

Our article Duties of a Bookkeeper includes the importance of careful filing of invoices and associated paperwork as well as the necessity to have all invoices properly approved and to eliminate any possibility of paying an invoice twice.

The business owner needs to set out the system to be followed within his business and Duties of a Bookkeeper demonstrates the safeguards that need to be incorporated. Bookkeeping records and invoices are required to be kept for six years, a requirement of the UK Revenue.

A Free Bookkeeping Course

Included within Admin Advice is Colin’s Easy to Learn Bookkeeping Course. These days it is very easy to install a computerized bookkeeping system without understanding what the system is actually doing. If any mistakes are made it can be a nightmare to work out how to correct them.

The seven lessons are written with the entries being included in a manual bookkeeping system – required learning for anyone interested in establishing themselves as a qualified bookkeeper (the route to qualifying as an AAT bookkeeper is suggested for those who find the course of interest).

From the business owner’s point of view an outline understanding of double-entry bookkeeping and how the profit or loss is calculated will probably suffice. This information is included in a very readable and practical explanation of the subject.

Simple Rules Of Bookkeeping

Colin’s course is virtually unique in that it concentrates on very simple basic rules (instead of the Accounting Equation teaching methods used by most courses). This is a method that Colin has successfully taught to adult classes and we believe can be of help to all office staff. The course is based on logical facts:

  1. There are only two ways of completing business transactions – you either buy/sell items or services and payment is made at the time OR you buy/sell and agree the invoice covering these items or services can be paid at a later date.
  2. There are just two rules relating to items paid for immediately as these are entries to the debit or credit of your cash account.
  3. There are two simple rules relating to items purchased which we will pay for at a later date.
  4. And there are two simple rules relating to items sold where we will receive money at a later date.

The Accounting Equation which students find difficult when introduced early in a course is then included within the very last of the seven lessons.

We would like to think that this introduction will result in more people taking up bookkeeping training as there is a shortage of bookkeepers throughout industry.

Computerized Bookkeeping Systems

We have identified more than 300 computerized bookkeeping systems of varying costs and complexity. Within the UK businesses registered for VAT are, from 2019, required to submit their VAT records digitally through connections to their computerized bookkeeping systems. Most of the 300+ systems out there will not be in a position to comply.

If you are an employee, or will be looking for employment within an office environment, the systems you are most likely to encounter are Sage Accounts, Xero Accounts, KashFlow Accounts and QuickBooks Accounts. We can direct you to a comprehensive set of YouTube videos that cover every entry within these packages.

Having learnt the basics from our seven part bookkeeping course, plus having confidence to run these accounting packages, you will be in a strong employable position.

Free Accounting Software

The vast majority of bookkeeping software packages make what should be a simple task extremely daunting, as they attempt to cover all business scenarios.

In the latter months of 2014 a team of UK accountants and software developers set out to provide a bookkeeping system catering for the smaller UK business, a system that doesn’t needlessly complicate the process of recording business financial transactions.

They have developed the Pandle accounting software with a free version which they state will remain FREE FOR LIFE.

A version including extra features such as automatic bank feeds and a selection of invoicing templates is Pandle Pro, at a monthly cost of £5 + VAT.

Pandle Accounting Software

Pandle is targeted towards small businesses that have little or no bookkeeping experience and require a double entry system that they can use and understand.

Pandle has been 3+ years in development, has completed over 11,000 hours of testing and now has over 9,000 users.

We have seen more than a dozen independent reviews resulting in Overall Ratings 5/5, Ease of Use 5/5 and Customer Service 5/5. The reviews have included:

I didn’t have any experience using bookkeeping software and Pandle has been perfect to start me off

Pandle is so easy to use and has a great range of features

Pandle has saved us so much time when doing the business accounts

It’s really quick and easy and when I make a mistake it’s really easy to fix

The customer service was brilliant

You can follow what the app is doing with your data and quickly get to grips with the resultant double entries

Everything I need to do is done

To visit the Pandle website click here.

Accountancy Services at Affordable Prices

From the bookkeeping tasks, which the business owner may decide to complete himself, have a family member perform the tasks, employ part-time or full-time bookkeeping staff or perhaps out-source the business bookkeeping, we move forward to the possible needs for professional accountancy services.

Self-Employed Simplified Taxation

The UK Inland Revenue have simplified the taxation for small businesses by inclusion of their “Self-Employed Simplified Expenses” for use in self assessment returns. The expenses covered are business costs for vehicles (by use of a flat rate per mile instead of recording all vehicle running invoices), a flat rate for working from home (based on the hours worked within your home) and living in your Business Premises (for guesthouses, bed and breakfast etc.)

Tax returns may also be made on a cash basis rather than adjusting for accruals and prepayments etc.

The above options are included in our article Pay Less Tax UK which also includes a reminder about claiming a possible £650+ Marriage Allowance rebate.

Many self-employed are completing their self assessment tax returns without the aid of an accountant and most mortgage providers will accept Inland Revenue’s statement of income, no longer insisting on a set of certified business accounts.

As a guide to the cost of accountancy services we have found professional services at or around the following costs:

Business Planning (3 Years) £300

Sole Trader Accounts, providing service, calculating tax and filing tax returns £150 – £200

Limited Company Accounts and returns £350

Bookkeeping from £18.50 per hour

Sole Trader Full Accounts Package (final accounts and tax, monthly bookkeeping, monthly management accounts, ongoing support) £27.50 per month.

We have provided two articles to assist in the planning and financial control of your business, the information is included within Prepare A Business Budget and Make Reports with Excel (featuring monthly management reporting).

Marketing

Have you completed promotional and marketing plans for your business? These are methods to measure your business success and review your strategies.

The Promotional Plan

About you: what do you offer, can you create a brand identity, what are your strengths and weaknesses?

Your market: what are the opportunities and the threats, who are your target market, how do they shop and what do they need?

Your USP (Unique Selling Point): can you create a unique selling proposition that will engage your target market?

Ongoing Review: measure the effectiveness of your promotions and refine as necessary.

The Marketing Plan

Have you researched and analyzed your market? Having defined your potential customers you must devise a plan to enter the market. Forecast your sales and quantify the potential demand. Budget for your marketing costs and decide upon your marketing activities. Measure your results and refine as necessary.

The Business Website

At the very least a good website adds credibility to your business. A quality website can also lead to many income channels you otherwise would not connect to. For example, say your business provides catering for weddings, parties etc. you might promote on your website, with an affiliate link, say, a marquee hire business. You will then receive a commission on any business the marquee hire company receives as a result of someone contacting them from your website.

Affiliate Marketing

The above example introduces us to Affiliate Marketing where, in this case the marquee business has asked you to promote their business on your website in return for commissions on all business they receive.

Similarly, you may decide to offer your own affiliate program and perhaps ask a business hiring out tables, chairs etc. for all occasions to include a link and advertisement to your catering business.

Affiliate Marketing is a huge business throughout the world, not least because there are no up-front costs. Commissions are paid out from business received.

In summary, affiliate marketing programs work by rewarding websites that deliver business to other websites – as an advertiser, you only pay if you make money!

Affiliate Marketing Programs

Affiliate Marketing covers industries in travel, finance, shopping, telecoms, automotive and most other sectors. You will find that most businesses of any size have an affiliate program, examples being Amazon, Dell and Domino’s Pizza.

Businesses such as Go Compare are effectively affiliate marketers.

Extra Income Potential

Affiliate Marketing can provide excellent additional income to existing businesses and there are many marketers who concentrate on creating informative websites that they then monetize via affiliate commissions. Our article on this subject is Top Affiliate Marketing Program

The company Wealthy Affiliates is at the forefront in teaching affiliate marketers and has created industry leading facilities which we have covered in our article Simple Website Tutorials.

Websites, Hosting, Backup, Security, SEO etc.

Will you be employing a web designer to create your website or will you be creating it yourself?

People are leaving school/college/university with the ability to create websites. The problem here is that technology is rapidly changing and keeping abreast of the changes is almost impossible on your own.

Build Your Own Websites

About four years ago we had a desire to build our own website. At that time we had seen a number of businesses building cheap websites – they came and they collapsed – often leaving their clients with websites that no longer worked. How damaging can that be to a business?

There were also website creators charging ongoing monthly fees that many smaller businesses could not justify.

World Leading Facilities

It was during our search for a reliable platform where we could build our own websites that we were introduced to Wealthy Affiliates, a world leader in fast website loading times, security, SEO and technology. The tutorials at Wealthy Affiliate cover every aspect of website creation and marketing and they have a community of 1,400,000 members, including multi-million dollar businesses running on their servers.

For those wanting to develop websites themselves and become experts within the industry the low cost of Wealthy Affiliate membership (less than $1 a day if paid annually) is essential.

Website Hosting

Our article Small Business Start Up Advice details the substantial values of being a Wealthy Affiliate member, including having your websites hosted on ultra-fast and secure servers which are often charged at $250+ each month elsewhere. You can have 50 websites with all hosting fees covered by your membership fee.

Our other articles covering aspects of websites are Simple Website Tutorials and Small Business Website Advice. The latter article includes information about selling on E-Bay and Amazon and details the three types of hosting on offer with their varying website load speeds and the effect this can have on Google rankings.

Website Builder Quotes

Websites may be built from a code base such as HTML, Ruby on Rails and PHP. WordPress is the most common platform.

It is possible to have websites built by established businesses with prices starting at:

£250 for a 3 page starter site

£350 for a brochure site

£650 for an online shop

and Social Media Management at £200 a month.

Conclusion

At Admin Advice we continue to research the administration arena of business to bring affordable options to everyone involved in this aspect. We aim to help and will always be pleased to respond to comments and questions left below.

It Will Pay to Study

One final word – it is never too early to start learning bookkeeping, accounting packages and website creation. These are fast expanding areas with a long-standing skill shortage and probably offer one of the most lucrative opportunities for the future.

 

 

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