Spring clean your business

While economic recovery may be in sight, keeping costs down is still important.

Ah, the wonderful fecundity of spring: lambs a-playing in the fields, flowers a-blooming in the garden and after months and months of semi-permanent darkness, the sun is finally a-shining - which means any cobwebs which built up over the winter have become all too apparent.

With the downturn busily defiling business' finances, now is a great time to start dusting off your accounts and clearing away the cobwebs of recession by looking at exactly what your costs are and how you can reduce them. From marketing to utilities to office space, there are always ways you can make savings.

One of our clients was spending £2,000 a month on classified ads, which was only generating six responses. They'd been doing it for years, but as soon as they started monitoring, they realised they needed a change.

Don't know where to start? We've looked at some of the easiest ways you can spring clean your business.

Marketing: increase your ROI sevenfold

Don't be tempted to just cut your marketing spend: instead, try to evaluate where enquiries are coming from and which ones are converting to sales.

Once you've assessed your leads, use the results to decide where to concentrate your marketing spend. Spend three months monitoring the sources of your leads, and where your spend is working will become apparent very quickly.

Steve Jaggard, co-founder of Further Search Marketing, says during the recession, businesses need to take a fresh approach to marketing. Consider testing out new forms of advertising.

"One of our clients, a magazine publisher, was spending £2,000 a month advertising in classifieds, which was only generating six responses. They'd been doing it for years, but as soon as they started monitoring, they realised they needed a change."

The company tested it against pay-per-click advertising, which generated seven times more enquiries. "Now they're spending the £2,000 on that instead."

Once you have evaluated the sort of returns you're generating, challenge a marketing agency to improve on your results. It shouldn't cost anything for the agency to have a look and if after three months they haven't improved, try something else.

Ensure you're marketing and cross-selling to existing customers. You could significantly increase profits by simply convincing existing customers to spend more.

Now is not the time to be investing in long-term campaigns, though: look for a quick return on investment (ROI). Choose a tactical campaign which will help you retain customers and attract new ones.

Premises: save money on service charges

Premises will be one of your biggest expenditures, so if you're looking to cut costs, this could be your best bet. There are three main areas where you may be able to save money: rent, business rates and service charges.

With the commercial property market in ruins, there are relatively few prospective tenants out there, so landlords need to be more competitive - which means now is the perfect time to think about negotiating your rent.

If your lease is due to expire or your break clause is due to come into effect, negotiate. Be honest with your landlord and tell them you can't afford the rent unless they help you out, and offering something else in return: your product or service, for example.

Alternatively, try bargaining by comparing your rent to others in the area or offer more the landlord security by agreeing to a longer contract. "The reality is, if landlords aren't flexible, they won't have a tenant. Show them there might be something in it for them," says Andrew Pegg, managing director of property consultancy Midas Corporate Consulting

Be aware of service charges as well. Your landlord has a legal requirement to keep your property maintained to a reasonable standard, but if you're footing the bill for expensive alterations or improvements, confront them. The Royal Institution of Chartered Surveyors (RICS) is due to publish a code for service charges later this year. 

Space can also be a major money-saving factor. "The property industry focuses on people taking up as much space as possible," says Pegg - but you can reduce it by looking at how you work or even by reducing the size or your desks. Alternatively, move. "Just moving a few miles can make a big difference in rent," says Pegg.

Sub-letting the part of your office you aren't using may also be an option if the end of your contract is still some way off, but be aware that you will take on the responsibility of landlord, which means making sure the space is kept clean and in good condition, as well as footing the bill for damages. If you think you'll want to move once your contract ends, it may be difficult to find tenants who will want to move as well. "You're unlikely to find a tenant who will take it for six months or a year," says Pegg.

Software: save £200 per employee

With Microsoft Office Business edition costing upwards of £200 every time someone new joins your business, software licensing can become very expensive. But with the open source software movement becoming increasingly mainstream, why not try working for free?

Not only is open source software free to download, but it also gives you access to the code which you can alter to your requirements - which means you can customised it entirely to your business' needs.

"These things started off as specialised and gradually more and more people got involved," says Charlie Hull, chief executive of software company Lemur Consulting. "In the last couple of years open source alternatives have really come into their own."

Look at software such as Open Office, essentially the same as Microsoft Office but free, and backed by Sun Microsystems. Mozilla, which makes the Firefox browser, also makes Outlook replacement Thunderbird; and if you want a basic photo editing package, don't fork out for Photoshop - try Paint.net instead.

Open source could also be more secure. "If I say my email software is entirely secure, you'd just have to trust me. But if I show you the code and say it's been looked at by thousands of people, it will actually be more secure," says Hull

Look for user and developer reviews to gauge how reliable software is. "If there's a community around a project and it's been around for a while, then it's probably reliable," says Hull. "If it appears to be a little stale or it hasn't had many updates for a while, that's something you should probably avoid."

 

Smarta Business Builder

To help you on your business journey, we've created Smarta Business Builder, the complete online tools package for growing your business. Website Builder, Business Plans, Accounting Software, Legal Documents and Email - all in one place - from just £20 per month with no contract! Try it out today.