Originally written by Dan Matthews on Small Business
Ask most people what they think is the biggest cost a business faces and they’ll tell you its salaries. But what about small businesses with perhaps just one or two staff members, or even sole traders with no employees at all?
According to official government data, of the six million UK business currently trading just 1.1 million are employers. The rest are operated by their owners, who usually pay themselves through company profits instead of via a salary.
In fact, for the vast majority of UK businesses, the biggest annual business expenses are much more likely to be tax liabilities and energy usage.
Research from Smart Energy GB, published in August, revealed that small businesses had on average around nine weeks of cash reserves before they would have to shut their doors. That’s despite more than half, or 56 per cent, admitting they would have greater control over their expenditure if they understood the business’ energy use more clearly.
If you are one of the 56 per cent, then it could be time to revisit your cost base and implement a new strategy. Tracking your spend is a vital component of healthy cashflow, which in turn is