Running a business can be expensive, particularly in the early days of start-up. Overheads costs like buying computer equipment, software and office rent can be particularly taxing. However, there are a number of ways to reduce your operating costs whilst still running your business in an effective way.

Here are a few ideas of how businesses starting out can save money.

Create a monthly budget

A great way to sensibly reduce your monthly business outgoings is to plan for it – a simple budget that takes into account all of your expenses and all of your income is a good place to start.

Although you want to reduce your overall monthly expenditure, this is not about skimping on the quality of service that you offer to clients. Creating a budget will show you where you might have costs savings – do you really need the top of the range broadband package or would it be better spent on bringing a new client on board.

A key tip with budgeting is to always overestimate your outgoings and underestimate your income. This ensures you always have a bit of leeway and ensure you have enough each month to cover your expenses.

Once you have created your budget, don’t forget to review it on a regular basis to make sure it is still valid. Set a time each month to compare your actual spending and sales to your budget forecasts. Reviewing your financials regularly is going to help you have better insight into where your cash is going, and opportunities to bring more in.

Minimise your utility costs

Utilities like gas, water, electricity and to some extent broadband are just some of those core costs that are needed to quite literally “keep the lights on”.

There are two ways to cut your core utility costs –

  1. reduce the amount of usage
  2. find a cheaper supplier for your existing usage

At this point it pays to shop around – but make sure you are comparing like for like. If you have a existing contract, review the terms and any termination costs. Be aware of the renewal dates and before making a final decision don’t forget to seek out reviews on many of the trusted review and comparison websites.

Once you have decided on your supplier try a little negotiation. A new provider may not be able to slash their prices further – but they often have introductory bolt-ons that might sway your decision. It is almost a case of “if you don’t ask… you don’t get”.

You may also find that you are able to save more money by opting for direct debit payments or signing up online.

Broadband and telephones

Broadband and telecoms are two vital tools that ensure a business can communicate with its customers effectively. Although you cannot avoid these costs entirely by taking into account your likely monthly usage you can help prevent excess spending.

For instance, a software business will require significant bandwidth and data download provision on its broadband package. Whereas a small business of one or two employees might simply need a much smaller package. Again, look out for the extra bundles that broadband providers offer alongside their data packages – e.g. Office 365 and cloud storage.

If you don’t make a lot of calls then consider using a Voice Over IP (VOIP) system which means you can reduce the call costs of a dedicated telephone system and stay connected wherever you are.

Technology and moving to the Cloud

As we have seen during lockdown, the rate at which businesses and individuals have embraced new technology has been phenomenal. Commentators suggest that in the 18-months of COVID, developments in digital have powered on by at least five years.

All this development means there are many significant tools in the small business and start-up space. Technology has helped automate a number of daily tasks. Online banking, accounting and HR tasks are just some of the tasks that can now be automated. Automating these types of tasks reduces the time needed for staff to spend on them and reduces the chance of human error.

Here’s some examples

  • Consider choosing a cloud-based accounting system to handle your bookkeeping and payroll.
  • Sync it with your online bank account to see instant snapshot of money in and money out whilst reconciling statements becomes much easier.
  • Send out your invoices automatically and digitise any expense paperwork that you might receive.
  • Microsoft Teams and Slack are just two of the cloud-based software vendors to make a name for themselves during lockdown. Both offer collaboration tools that are useful for small teams to keep in touch.
  • WhatsApp and Skype are great free alternatives for group communication and video calls.
  • Although Microsoft 365 is now available as a cloud solution, Google’s Workspace can offer a cheaper alternative, whilst still offering a range of business services. Google Workspace for Work gives you a professional email, online storage, shared calendars, video meetings, and more.
  • Running social media campaigns and need Photoshop-style tools to create your posts? Why not give Canva or Ripl a try.

For most businesses, cloud computing is an excellent way to reduce both capital costs and ongoing expenses related to IT services.

By using cloud software, you should always have access to the very latest software online, without the need to invest in expensive servers or pay for ongoing upgrades. You also get the flexibility to increase your choice of tools as and when you need them. Another big bonus is being able to use your software across all your devices – desktop, smartphone or your laptop.

Most cloud providers also take care of data recovery issues if the worst should happen.


When resources are limited, then outsourcing some of your requirements can be a cost-effective way of getting project work completed. Many businesses will outsource their marketing and advertising activities to an agency for instance. This can be a much cheaper way of gaining access to specialist expertise without paying a salary for a full-time employee.

For one-off projects, hiring a freelancer can be a great low-cost option. But make sure you read their reviews (if you are using something like Fiverr). Alternatively ask for testimonials from their current client list.

If you do use an agency for longer-term pieces of work, make sure you get to know them well so that they understand your business and can help you make a real impact.

Reducing supply costs

If you are running the type of business that relies on buying in stock to sell it – either in-store or online, then it makes sense to get the best deals you can from your suppliers.

As a business owner, this means keeping an eye on current price trends and checking for opportunities for discounts or finding new suppliers. Asking for discount can be very embarrassing for some people. However many suppliers will offer discounts (or extend payment terms) if they are asked.

Remember, it is easier to ask for a discount if you already have a good relationship with your suppliers. Like any business if you are a prompt payer of their bills, then you increase the odds of getting a discount or being offered more favourable rates.

Reducing office space

One thing the COVID pandemic has showed us is that many businesses are capable of working more flexibly in terms of their office space. Over the last 18 months, working from home has become a viable option for many businesses. It has meant many businesses question their investment in owning office space and look at alternative ways of working.

If your business can have remote workers and you are willing to allow employees to work from home, then telecommuting could help you save on significant operational costs.

Many firms are looking at a hybrid model of combining working from home with some employee time in the office.

Coworking on a regular basis or simply renting a desk or hiring a meeting room when you need them offers a new level of flexibility that many businesses are now enjoying as we come out of lockdown. Using shared office workspaces are a much cheaper option than being tied into the leasehold of a property. Plus you are not paying for the utilities either!

The intangible benefits of being around other people can also open up networking opportunities that you might not have had before.


We hope this article has given you some ideas of ways to reduce the costs of running a business. All whilst still maintaining the high standards of service delivery your customers expect.

Here at Purple Office we have everything you need for your modern business to thrive.

  • Rent a desk on an ad-hoc or regular basis
  • Book a meeting room for team meetings, client meetings or interviews
  • Stay connected with our Ultra-fast WiFi
  • Enjoy a co-working space with social interaction and networking opportunities
  • Complimentary tea, coffee and printing
  • Virtual Office facility (use of our business address)
  • …and many more

Drop by for a visit or browse the rest of our website for more details about our services.