Having a business has been your dream for a long time, and now, you can finally see it coming to life right before your eyes. But you may have to face some harsh realities sooner than you think especially if it is your first year running and operating your business. And, needless to say, one of these harsh realities includes the cost of running your business.
They say that the first year of operations is often the costliest one, and they are right. This is the time when you don’t really have an income to speak of, and expenses can become sky-high. Even if you have thought of every imaginable expense, from the cost of equipment to the cost of salary and day-to-day operations, there may still be some expenses that you may not have foreseen. That being said, it definitely pays to be cost-efficient. Being as cost-efficient as possible during your first year of business can make a vast difference to your available resources. When you are cost-efficient, you are essentially finding the best way to deal with expenses and can avoid any costs which are unnecessary. Whilst cost-efficiency for one business can mean an entirely different thing for another business, there are some general cost-efficient measures any business can take.
How to be more cost-effective
- Use your home as a base of operations
One way in which you can become more cost-effective and save on expense is to work from your residence rather than rent office space. Whilst some enterprises need to have a more ‘official’ location where they can meet with their clients and negotiate, other businesses can function well even from home. If you have an online-based business, for example, then you can perhaps cut down on your expenses simply by operating from home rather than from a commercial office. Renting space for your office is a substantial fixed expense, so if you can do away with it, even for just the first year, then you can save a lot of money.
Additionally, if you use your home as your office, you can also make tax claims on such things as utility bills. The premise behind this is that you are using your utilities for your business, so you have the right to make a tax claim for this as well. However, make sure to confirm these ‘business expenses’ with HMRC first and learn more about tax relief from them so you know what to expect.
- Opt for an office which is fully-equipped or serviced rather than a bare space
If you do have to rent an office, then you may want to consider office space which is already equipped with the basics of what you need. These furnished office spaces can provide you with computers, printers, desks and chairs, and even kitchen or pantry appliances and accessories so you do not have to spend on your own office equipment. Although the rent for these furnished offices can be more expensive compared to a bare office, think of the amount you can save during your first year if you do not have to invest in equipment. Once you have survived your first year, you can then consider buying your own equipment and other major office essentials, but in the meantime, you can save much-needed finances in your first year by opting for a furnished or fully-serviced office.
If you would like to have better peace of mind when it comes to your financial resources and your cashflow, you can always turn to cashflow experts such as ultimatefinance.co.uk for their cashflow solutions, which include invoice discounting, factoring, asset and trade financing, and more.