Small businesses are losing thousands of pounds each year due to a “lack of time” to manage all their expenditure and outgoings.
Researchers polled 500 SME owners and decision-makers and discovered that small businesses are losing nearly £350 each month on average – equating to approximately £4,000 per year – due to not having enough time to review their spending.
Added to this, 68 per cent of small business owners claim they haven’t updated their approach to managing expenses in a significant period. However, the majority (89 per cent) are willing to adopt a new strategy, and 57 per cent are already turning to technology to manage their business finances and boost productivity.
When it comes to keeping on top of their running costs, the research found more than one in four (26 per cent) SME owners lack the time to thoroughly review their energy bills, while 20 per cent wish they had more capacity to focus on software and tech.
And a ‘forget-to-cancel’ culture, whereby time constraints cause regular subscriptions to renew automatically, is also affecting their finances, with 24 per cent of small business owners attributing increased expenses to letting subscriptions run on.
A further 41 per cent have paid for unused subscriptions, with 39 per cent forgetting renewal notices and nearly half (45 per cent) overlooking subscriptions because they were smaller costs.
The research was commissioned by Smart Energy GB which is working with Nisha Katona MBE, founder of Mowgli Street Food and TV presenter, to share The Accuracy P.L.A.N.: Why It Pays To Know Your Bills – a free resource to help small business owners navigate their way through their business expenditure.
Nisha commented: “Small business owners have to navigate their way through endless expenditure and keeping a close eye on bills is critical to a business’s success. When I started my business, I had so much to juggle that I didn’t really put my mind to my energy usage but if I had, I could have saved so much more money.
“Getting smart meters installed in my restaurants helped me, and my team, to better understand our energy usage, which in turn has helped me change the way I run my operations and have more control over our energy spend.”
According to those polled, energy bills are the top concern for business owners, with 43 per cent identifying them as a major worry. Despite this, 22 per cent say it’s been over a year since they reviewed their business energy supplier.
Almost one in three small business owners (31 per cent) think they could reduce energy costs if they had more time to review them. Other areas of potential savings include insurance premiums (23 per cent) and broadband (20 per cent).
Victoria Bacon, Director at Smart Energy GB, said: “The research highlights the time pressures and range of responsibilities small business owners have. Also, their concerns, especially around managing their finances and running costs.
“One thing owners can do is get a smart meter installed, which can help them save both time and money. Smart meters send readings automatically to the energy supplier, putting an end to manual meter readings and estimated bills. The data smart meters provide can help owners identify where cost savings could be made and help them have more control over their business’ energy spend. That’s good for cashflow and budgets.”
Managing finances can take a significant toll on small business owners, with 41 per cent of survey respondents reporting an average of five or more sleepless nights per month. And more than a quarter (28 per cent) feel stretched daily due to the overwhelming volume of tasks and administrative duties associated with running a small business.
The research found that a third of SME owners believe implementing simple processes, such as a monthly review of expenses or comparing supplier costs, could help them better manage their finances.
The Accuracy P.L.A.N: Why It Pays to Know Your Bills , a free resource for small business owners, is available HERE.
TOP 10 COSTS BUSINESS OWNERS SAY THEY COULD SAVE MONEY ON, IF THEY HAD MORE TIME
- Energy costs
- Insurance premiums
- Supplier costs
- Technology and software
- Marketing and advertising
- Equipment and maintenance
- Broadband
- Professional services e.g. accounting
- Office supplies
- Subscriptions
Nisha’s Top Tips for Small Business Owners:
- Set clear goals for financial success
Whether you’re aiming to increase profits or cut costs, setting clear goals gives you a roadmap for success. Maintain accurate financial records and closely track all your expenses, including energy costs. This will save you time and money in the long run, so you can focus on what really matters – growing your business.
- Get a smart meter installed
Smart meter data can help give you more control over your business’s energy spend, and help you monitor energy usage and identify where you can make some cost savings.
- Encourage energy-saving habits
Implement simple energy-saving practices like setting timers on lights and turning off appliances to avoid wasting energy when they’re not in use. At Mowgli Street Food, we started coming in a little later in the morning, which saved energy as we reduced the hours we were in the kitchen with the lights on and the ovens running. Keeping vents and equipment clean ensures they run efficiently.
- Educate your team
Teach your team good energy habits. It’s important they’re on board with your energy saving measures and understand the cost of energy and how even small changes in behaviour can make a big difference to an energy bill. They may also have their own ideas too.
- Invest in energy-efficient equipment
While the initial investment may be higher, upgrading to energy-efficient equipment can lead to substantial long-term savings. These appliances consume less energy, reduce operational costs, and contribute to a smaller environmental footprint.