Could changing a light bulb help keep your business afloat?
‘I was shocked when my electric bill almost doubled from £60 a month to £110’: Could changing light bulbs help keep your business afloat?
Action: Marketing boss Amber Leach saw her energy bill double
The cost of living crisis is not limited to households – small business owners are also facing acute challenges that are eating away at their incomes and threatening their livelihoods.
From skyrocketing energy bills to rising raw material and shipping prices, many small businesses can feel like their expenses are spiraling out of control. And that’s before the impact of rising taxes and wage expectations.
Martin McTague, national chairman of the Federation of Small Businesses, said: ‘They are at the mercy of skyrocketing energy bills. They don’t have the bargaining power of big business, or the financial protection offered to consumers.
Bills for some small businesses have increased fivefold, he says, adding: “We know many have little or no cash reserves, while for those with loans, the prospect of higher interest rates is scary.”
Here are some steps business owners can take to limit rising costs.
REDUCE ENERGY BILLS
Tim Rundle-Wood, owner of Twoodle Co, which sells candles and diffusers made from natural ingredients, was stunned when a small change made a huge difference to costs at his east London shop .
In response to his bill which rose from £84 to £353 per month in April, Tim switched off some floodlights inherited from the previous occupant. He says: “I thought it was energy-saving LEDs. They weren’t as our bill fell to £157 – without affecting sales.
Consumer champion Helen Dewdney, who calls herself ‘the complaining cow’, says a 20% reduction in energy costs can be as good for a company’s bottom line as a 5% increase in sales .
She says: “If you run a small business, encourage staff not to leave doors open and make sure the last one out of the office or store turns off the lights.”
Windbreaks can prevent heat loss, as can sealing unused windows and doors. Timers ensure that the heating is not turned on when the premises are empty. Temperatures can be set lower in areas with higher physical movement, such as stairs and hallways. Staff should turn off devices such as computers, printers, monitors and televisions at the end of the day.
Amber Leach runs Established By Her, a marketing agency in Plymouth. She was shocked when her electricity bill nearly doubled from £60 a month to £110. She says: “I called the supplier to reduce the ongoing charges. Now we pay more per unit of electricity, but a lower permanent load, so we have more control.
Amber also has a solar-powered generator in the office that charges cell phones, laptops, and camera equipment.
CLAIM ALL INDEMNITIES
Small businesses should make sure they claim all available tax relief.
For example, the FSB provides access to legal advice and provides assistance with late payments, while local authorities often provide discretionary assistance.
Employment Allowance helps small employers to mitigate National Insurance costs. Pubs, shops and hotels can apply to have their business rates halved for the current year, while the grants help businesses cut energy costs and develop new products. Visit gov.uk/business-finance-support.
REDUCE SHIPPING COSTS
Husband and wife team Lisa and Philip Ingram have cut the cost of importing goods in half for their Hampshire business LittleLeaf Organic by managing part of the supply chain themselves.
They founded their organic cotton business five years ago, employing shipping agents to deliver goods from India to Alton. During the pandemic, their shipping costs more than tripled to £1,850, so the couple looked for ways to reduce them.
“For our latest expedition, we hired a van, drove to Southampton and loaded the goods ourselves. In total, it costs less than half of what we normally pay,” says Lisa. The Ingrams have also saved money by purchasing a Leaf electric car which they use to bring fulfilled orders to the local post office.
£25 offer for Amex expenses
American Express users will receive a £5 credit every time they spend £15 or more at select small businesses between June 20 and June 26.
The “small shop offer” allows cardholders to receive up to five credits, but they must register from tomorrow via American Express’s app or their online account. Cardholders will be spoiled for choice. In Birmingham, for example, they can get credits at one of 50 outlets, mostly bars and restaurants.
Dan Edelman of American Express said, “After the past two years, it’s important to support the small businesses that contribute so much to our high streets and communities.
Small Business Essentials