UK businesses of all shapes, sizes and sectors will face economic challenges in the year ahead. To ride out the storm, you’ll need to mitigate financial pressure and stress by implementing practical solutions.
This is sometimes easier said than done. That’s why we’ve put together five top tips to help your business start smart saving. Read on for all the insights…
1. Create a budget – and stick to it
Work with what you’ve got, and don’t start spending money you don’t have. Map out a budget that assesses the money coming in and going out, giving a holistic overview of your cash flow position. With eyes on everything, you can cut unnecessary spending and make more rewarding financial decisions.
And remember, there’s no point writing a budget just to ignore it. Make sure you stick to your spending pots. Otherwise, you’ll fall at the first hurdle.
2. Set your SMART goals
There’s little use in saving money without knowing what it’s for or how much you need. Unless you have specific and achievable targets, you won’t make the most of your money. For example, are you saving to update your equipment or hire new employees?
While we’ve stressed the importance of planning, you don’t necessarily need to save the same amount each month, nor do you need to set aside large sums. It’s all about being realistic and working with what you’ve got.
When setting goals, divide them into short and long term. Follow the SMART method:
- Specific: It’s much easier to save when you set clear objectives with fixed outcomes.
- Measurable: Quantifying your goals means you can track your progress and stay motivated.
- Attainable: Are your goals realistic and achievable? Don’t set targets you can’t reach.
- Relevant: Remember, you aren’t saving money for a rainy day. Your goals are only worth putting the effort into if they’ll genuinely add value.
- Time bound: To stay committed, you need a real deadline. Set a time frame, or you might end up kicking the can down the road.
3. Prepare for the unknown
Goals are good, but getting smart with your savings means preparing for the unexpected.
As you’ll know, anything can happen in the world of business, especially in the current economic climate. So, it’s worth creating a contingency plan to better equip your organisation for turbulent periods.
4. Build your emergency fund
Planning for the worst-case scenario means you’ll be in the best position to weather any challenges. An emergency fund provides a financial safety blanket.
Financial experts recommend saving enough to cover your business for approximately three to six months. In other words, enough money to pay for:
- Potential unexpected costs
- Slow sales periods
- Unplanned events like a natural disaster
Your emergency fund should be in a separate but easy-to-access account, so you’re not tempted to use the money for any old expense, but can withdraw it quickly if you need to.
5. Find the right saving method
A quick Google search will tell you a million different money-saving strategies – from outsourcing and taking advantage of free services, to negotiating tax obligations. But it’s all about finding a method that suits your individual needs and circumstances.
Consider all your options and speak to a money-saving expert to ensure successful saving.
Get smart with Nabarro Poole
When the budgeting gets too convoluted and you can’t work out where to make savings, ask an expert to take a look. At Nabarro Poole, we provide accounting services to help you smart save. Our team is personable and knowledgeable, working closely with our clients to enable them to map out and reach their goals.
To find out more about our services, talk to our team today.