Money saving advice for small businesses
Photo by Kelly Sikkema on Unsplash
Set up your HMRC account
One thing that often puts people off starting their own business is knowing what to do and how to do it. Most people know there are some official channels to go through but feel intimidated by their lack of knowledge. The good news is it’s easier than you might think. So easy a teenager can start a successful business at home on the family PC. Navigate your way to the HMRC government website and click on the link relating to your business type, sole trader, limited company, etc. It has all the information you need to get started.
Consider business credit cards
Credit cards are not only for extra cash when you need it most or a way of investing in your new business. Certain business credit cards will also offer cashback on various business-related purchases. These might include office supplies, stationery, legal and accounting services, IT equipment and support, and fuel. You will also get three months 0% interest on purchases and one year of extended warranty cover. To be eligible for these cards, the applicant needs to have an expected annual income of £10,000 or more and a record free from missed payments.
Open a business account
When starting a new small business, it’s a very good idea to separate the business’s finances from your own personal finances. Create a money in, money out business account and pay yourself a wage from it; this is best for cash flow and tax purposes. There are different options to choose from; if you want a no-frill business account simply for cash flow, a second free personal account might be a good option. If you want a business account that helps you to issue invoices and run payroll, an account for a small fee might be more suitable.
Get saving
Whether your business is doing well or just starting out, it makes sense to put a little aside each month to start an emergency fund or pot for extra investment when needed. Depending on how your business is registered, you will have different options available. Sole traders can take advantage of personal accounts’ best savings rate since the business is registered in their name. For Limited Companies, you can’t move money into a personal account without triggering a tax liability, but good savings accounts still exist. What you pay for your savings account will depend on how much access you want to your money.
Cut your business overheads
A penny saved is a penny earned, as the old saying goes. This might sound frugal, but it’s hands down the best attitude to have for your new business’s success. Just like with household energy bills, business overheads need to be kept to a minimum. That means electricity, gas, and, Internet, among others. For instance, Collect and Recycle will pay a rebate per tonne for baled cardboard depending on market prices; the cardboard bale price can vary. Luckily, there are many excellent tariff rates available for businesses for these services, so you can benefit from updating your status to ‘business customer’ with your suppliers.
