Energy PEAK is in the game of supporting small businesses and their sustained success. In this post we want to highlight those hidden costs which may be bleeding money from your monthly or yearly budget. We enlisted the help of The Big Up’s Dana Stevens, a business coach to help shine a light on the hidden costs in your business. Check out her tip on cutting down on small business hidden costs at the end of this article.
1. Inflated utility bills
Water, gas, and electricity bills all run the risk of being inflated by unit rates which aren’t the best fit for your meter, or your business needs. We understand that as a busy business owner, giving time to your utility bills can seem low on the list of your priorities, but if you want to look at where you could save money over a long period of time, we would suggest giving your utility bills the attention they deserve. How to cut the hidden costs: Make sure you’re on the right contracts for your business. Be especially wary of dodgy utility brokers who hide their commission fees with inflated unit rates. If an energy broker, comparison site or switching service is transparent about their commission fees, then you can trust the deal they find for you is the best deal for you because you are the one paying for their services, not the supplier.
2. Employee turnover
According to recruitment company Monster, the average employee turnover rate in the UK is 15%, with the highest offenders in the private sector being retailing, catering, call centres, construction and media. According to Glassdoor, the average cost of hiring a new employee in the UK is £3,000. Having a figure on this process may motivate you to take measures to improve your employee retention rate and reduce this hidden cost. How to cut the hidden cost: There are a lot of elements that go into an employee’s reason for leaving and many of them, you have control over. You can influence job satisfaction by creating a safe and comfortable work environment with room for progression. In another post about making your hospitality business more sustainable, we learned that a company which engages in corporate social responsibility can reduce staff turnover rate by 50%. Consider aligning your small business with Manchester’s Net Zero goals and getting your staff involved too.
3. Office equipment repairs
We have already discussed how outdated and energy inefficient office equipment could be draining your financial resources in our energy saving post last month. It is worth mentioning again. It may seem like a cheaper alternative in the short run to simply call in for repairs on your office equipment, but investing in new and more energy efficient options could save you hundreds in the long run, let alone the time you would save not waiting for broken machines to be fixed. How to cut the hidden cost: This is an easy one, ditch the old equipment and bit the bullet by opting for a faster, more energy efficient model. This will not only save you money in repairs, but also in your utility bills, because your new machines won’t be wasting electricity if you choose the right equipment with energy saving settings.
4. Tax and accounting costs
After salaries, tax and accounting costs could be the biggest expense for your small business. Make sure you understand the different types of taxes you have to pay and where an accountant can help with this. How to cut the hidden cost: Make sure you hire an accountant you can trust to help you claim all the deductions and expenses you’re entitled to. Budget each month for the estimated taxes you will have to pay and keep clear bookkeeping records and receipts, so you can keep the amount of work your accountant has to do low, thereby keeping their fees low also.
5. The creeping costs of subscriptions
Dana, business coach at The Big Up, tells us that like that Netflix subscription that you rarely think about, tech and software subscriptions might seem small and insignificant but they can quickly add up. With digital and social marketing being an essential part of your strategies, as you grow you will undoubtedly start paying for email marketing software and social media scheduling tools. You might start using a design software like Canva to improve your social media posts, subscribe to the pro version of Zoom for your video calls or start paying for a project management tool like Asana or Trello. Even solo founders can find their subscriptions easily topping £150 a month and if you have a small team, it can quickly escalate far beyond that. How to cut the hidden cost: At least every 6 months, make sure you are doing an audit of your subscriptions. What services are essential? What is just a nice-to-have? Can you consolidate any? Your existing provider might have launched new features since you last checked or a new provider might be able to do the job of two of your existing subscriptions at a reduced price. A regular check in could save you hundreds of pounds so schedule your audit into your calendar.
Concluding thoughts on cutting costs
Hidden costs in our small businesses and personal lives usually stay hidden because we don’t have the head-space to tackle them and it is sometime easier to just let things slide. But pennies become pounds and we will waste hundreds and thousands if we do not carve out time in our schedule for cutting these unnecessary hidden costs. We hope this post has helped you, and big thanks to Dana for her contribution, you can check her Instagram out here for more great tips for small businesses. You can also use Energy PEAK to tackle those inflated energy bills for you. You can start with a free energy audit or even just a quick phone call requested by you here. Until next time, sending you positive energy!