6 tips to save money on your new business
Getting your finances in order is the first step to starting your business. It is recommended that budding entrepreneurs save at least six months worth of cash to cover living costs, plus whatever extra you’ll need to get your business off the ground.
Penny pinching isn’t easy, especially when in the throes of a blossoming business. To give you a helping hand, we have come up with these top 6 tips to help you save for your new business.
1. Find a mentor
Startups that have a mentor are approximately 20% more likely to succeed than those without. The reason for this is simple – mentors are entrepreneurs who’ve been there. Their experience of business successes and failures will help you plan more effectively, set budgets you can actually stick to and objectives you can meet.
Having a mentor will also provide you with valuable moral support and will be able to give tips of their own to help you live more frugally while saving money to develop and grow your next big venture.
There are many free mentor schemes in the UK to get you started. Check out the options available at mentorsme.co.uk and through the government website, both of which offer easy-to-access advice and guidance for entrepreneurs and startups just like you.
2. Barter or trade
Do you have a product or service that could be of use to another business? What can they give in return? Bartering with services and products instead of paying with cash is a great way to gain access to the things you need to launch your business, without having to fork out a large amount of cash.
The International Reciprocal Trade Association helps match companies interested in bartering for products and services. Your local Chamber of Commerce is also a great place to start.
3. Build relationships with suppliers
The right suppliers can save you a large amount of time and money once your business is off the ground – they provide high-quality products, a service you can trust and on-time delivery.
Having good relationships with them can gain you access to better business rates and could also earn you some wriggle room if you ever need to extend your payment terms.
4. Know your VAT
Not understanding VAT is a common area where new business owners are losing out. Are you paying the right amount? Are you aware of the Flat Rate Scheme?
The Flat Rate Scheme may benefit your business. It allows you to pay a single, flat rate of VAT on your turnover – what that flat rate depends on your industry. For more information on VAT returns, check out our VAT solutions.
5. Get smart with your expenses
Nearly three out of four small business owners don’t claim back all their expenses. This could be a costly mistake. Claiming expenses against your earnings could save you considerable money when it comes to doing your tax return.
Get yourself a free expenses app, such as 1tap receipts now and get into the habit of recording all business expenses on the go. Keeping on top of expenses can save you up to 20p on every pound you earn against your tax bill.
6. Get savvy with your accounts
Get an accounting and cashflow system setup before you start your business so you don’t find yourself overwhelmed by receipts and invoices. A good accounts system will also help you plan more accurately, be prepared for any expected circumstances and could save you money in the long run.
If this is your first business, taking on a dedicated accountant is advisable. They will help you navigate HMRC, provide expert advice and help guide your financial business decisions.
Looking to get your business off the ground? We can help! Get in touch today on 01903 234094.