How to cut costs - XLN Telecom

SME Guide: Cutting the fat, keeping the muscle
A third of SME’s won’t turn a profit this year, do you want to be one of them?
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TOP TIP
Review your outgoings
Take a look at your current outgoings. If you haven't
already got a comprehensive report, you need to draw
one up because it will come in very handy over the
course of this guide. For example, how much does your
business spend on broadband? According to North,
saving a pretty penny could be as simple as reviewing
your business's current telecoms packages.
"Customers and small businesses will often have their
broadband with one provider and their telephone with
another," he explained. "They've got two providers to
deal with - two phone lines, two sets of bills and on top
of that, they're paying too much. So we encourage
them to buy a bundle."
North also recommends reviewing business packages
with an objective eye when choosing such a deal. Are
you really going to need 3,000 mobile minutes and a
top-of-the-range Smartphone for your business mobile?
Is there another provider that could perhaps tailor your
package so you are only paying for what you use?
Take your business to a provider that is happy to spend
time working out what's best for your business.
SME tip - The
value of advertising
Miranda Ballard of Muddy Boots
Real Foods offered up the top tip
of making sure you don't throw
money away on useless services
and advertising, but how exactly
do you do work out the value of
each marketing campaign? "The
way to discipline this is to break
down every cost into the number
of units you’ll have to sell to raise
the equivalent margin to afford
it," she says.
"If advertising costs, for example,
£100 and you make 20p margin
after your costs on one unit, you
need to sell an extra 500 units to
afford this." So the question,
therefore, is whether you'll sell the
additional 500 units in the area
the advertising covers.
“It’s actually the small bits and pieces
that add up to make a substantial
saving and benefit for customers”
Edward North, Head of Product Management, XLN Business Services

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TOP TIP
Cutting the fat
When considering cost efficiencies, there are some drags
on the business budget that every owner turns to. With a
small business, employee salaries and property rental rates
are often the largest drains on the budget, and while it's fine
to identify the largest outgoings and tackle those first, be
careful while doing so. Never cut money that could have a
positive effect on your business when there could be more
wasteful outgoings elsewhere to be dealt with.
To this end, we recommend taking the time to identify every
wasteful penny before even considering cutting down on cash
flow that has the potential to help your business. As Miranda
Ballard, co-founder of Muddy Boots, says; "Never spend your
precious money on anything that won't make a return." Before
you sign up to any service that the salesperson claims will
benefit your SME, make sure it's worth it. Ask for data to back
up the sales pitch.
"We find it frankly rude now when people try and sell us
something and they can’t tell us how many hits their website
has, what the conversion to sales are, how many visitors to
the event, spend per visitor, average spend," Miranda says.
"Never be afraid to ask them."
SME tip – Using
your network
As an SME, it's likely that you'll
need to make use of professional
services outside of your own
expertise from time to time, or
even on a regular basis. While
many of us head straight to
Google, the Yellow Pages or the
village newsletter when skillseeking,
Jayne Hobin-Wright of
Slim'n'Saucy suggests using your
personal network first as a way
of potentially saving some
serious cash.
"You'll know a lot of people with
a lot of skills between them," she
advises. "Ask them to help out
for free while you're starting out
and pay them back for their time
once you're up and running."
“I'm very big on recycling. If I make a
dress for somebody and there's fabric left
over, I make it into a sample."
Christina Sesay, Owner, Sesay Bridal Wear

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Price comparison shopping
When you're looking to make a big purchase for your home, do you take the first
offer made to you? Of course not - you shop around. You do some comparison
shopping. Why should it be any different for your business? Consider every
business you pay - your accountants, finance providers, suppliers etc - and leave
no stone unturned in your mission to secure a better deal.
A good customer tip here is to shop smart. Edward North, XLN claims that far too
many companies rely on customer lethargy, preferring to leave them on the same
tariff until prompted. "There are too many businesses that are reliant on you taking
the same old tariff year and year. That's not in your interest," he says.
"Never spend your precious money on
anything that won't make a return."
Foods
Miranda Ballard, Co-Founder, Muddy Boots Real
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TOP TIP
Technological trickery
A computer and an internet connection is an essential part of day-to-day running
for many small businesses. As you're already paying for them, why not make an
effort to take back some of that cost by using them to save money? The UK has
the highest digital economy in the G20, Edward North of XLN states, and you're
going to be held back if you're not using it to make cost efficiencies.
"We have somewhere in the region of 20 per cent of our customers going online
instead of receiving paper bills at the moment," he says, by way of an example of
how the internet can be used to make savings.
“If you're not online, you're going to be
held back”
Edward North, Head of Product Management, XLN Business Services

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Government help
Small businesses are integral to the stimulation and
eventual recovery of the UK economy. This is a fact
that the government recognises. As such, small
businesses throughout the UK have been offered a
variety of tax concessions and initiatives designed to
help them stay in business, from research and develop
tax credits to grants for young start ups.
The trouble is, there are now so many of these
initiatives that it can be difficult to keep track, so make
sure you do your research. George Osborne's recent
budget saw the creation of a couple more concessions,
including the creation of a £2,000 employment
allowance for small businesses and the reduction of
corporation tax to 20 per cent are just two examples.
So make sure you're clued up on everything you could
be getting.
SME tip – Bartering
Partnership
When it comes to cutting costs, small
business owners can help one
another out by exchanging skills
instead of forking out the cash every
time they need a specific service. It's
an initiative advocated by Christina
Sesay, who runs successful Londonbased
Sesay Bridal Wear and
describes her entire life as a money
saving exercise.
"At the moment I have someone who
helps me with my social media skills
which aren't very good and I help her
as an exchange with sewing skills,"
she says. "So there's a mutual
exchange as opposed to having to pay
somebody to do something."
"Use your network at first. You'll know
a lot of people with a lot of skills."
Jayne Hobin-Wright, Founder, Slim'n'Saucy
XLN Business Services is the small business specialist and one of the fastest growing companies in
the UK. XLN supplies phone lines, calls, broadband, card processing and energy to 130,000 small
businesses. Businesses such as hairdressers, newsagents and restaurants across the UK rely on
XLN to save them money and keep their key services running.
www.xln.co.uk