5 ways to cut operating costs for SMBs: A checklist

What does the Budget Update mean for small-to-medium businesses?

There were a lot of updates in the Autumn 2024 Budget that will continue to impact small-to-medium businesses, causing them to keep a close eye on their costs to survive.

With wages, tax rates, and National Insurance Contributions increasing, small businesses face higher operating costs this year. While initiatives such as a draft beer duty cut and Business Rates Relief are intended to aid small businesses, rising costs remain a concern.

So, what can SMBs do? 

There’s no better time to start thinking about how you can adapt, cut costs, and increase efficiency for 2025. Read on for our tips!

5 ways small businesses can cut operation costs

1. See into the future

…Okay, maybe not literally, but budgeting tools can bring you close.

How many times have you found out you overestimated staffing levels or overspent on working hours only after it’s happened, once payroll comes knocking? 

With budgeting tools, you can better understand spending before it happens - in some cases, even see the impact on your wage bill as you schedule shifts.

Speaking of wages, upgrading your reporting process can also minimise payroll errors. Data from automatic timesheets can be pulled to create simple payroll reports, meaning you have complete visibility and control over spending. You aren’t wasting time by manually comparing rotas and timesheets, and you’ll have no nasty surprises at the end of the month. Who doesn’t want that?

2. Make the most of your existing team

Even though the most obvious cut to save money would be shifts and staff, you’d be surprised how expensive turnover can be for SMBs. Being understaffed is costly in many ways, but hiring, training, and covering gaps - it all adds up, too.

So, instead of focusing on reducing staff, optimise shift planning and work structure to make the most of the team you have.

Here are some examples:

• Smarter scheduling. Your experience combined with forecasting tools can help match staffing levels with demand - without affecting your service levels or budget. Plus, planning further ahead gives staff more visibility, which will benefit their work-life balance and retention.
• Increase flexibility. Allow staff more say in when they work (like availability and shift swaps) to improve work-life balance and allow you to plan ahead and reduce those last-minute changes.
• Empower employees. Give staff the autonomy to arrange shift swaps between them, reducing your admin time for finding appropriate cover.
• Boost agility. Ensure staff are trained across different roles so they can step in if needed, reducing last-minute panic or costly agency staff.

3. Review your time and attendance tracking

Time tracking is key in shift-based roles to ensure staff are paid correctly, but manual timesheets have their risks. Printing out daily timesheets for staff to fill in, often results in forgotten clock-ins, hours rounded up or down if they’re late, or unplanned overtime. The accuracy of the data becomes questionable, which isn’t ideal when it comes to payroll.

If your business requires a clocking-in-and-out system, consider a digital one. It will automatically track working hours against scheduled hours and create a far easier payroll process, rather than comparing sheets of paper. There’ll be less unplanned overtime, and you can pay people fairly (and accurately) for the hours they actually work.

As for annual leave, ditching the manual calculations and admin for a digital system doesn’t just save time and give staff visibility, but ensures you’re legally meeting the requirements.

4. Share your rotas further in advance

You might not think your manual rotas cost you, but they truly do. 

Changes happen - it’s only natural! But last-minute changes cause last-minute problems. Staff can miss updates, leading to no-shows and going over budget with cover.

We recommend sharing your rota no less than 2 weeks in advance to avoid this. That way, staff have plenty of time to see their shifts and submit change requests without amends being too last-minute. Make them easily accessible, too. Pinning a printout up in the break room isn’t enough. Post them online (whether that’s through WhatsApp group, shared Google Sheets, or your digital workforce management system) and make the final rota clear so everyone is on the same page and can check any time.

It reduces no-shows and shift confusion, meaning far fewer last-minute changes (and, in the care industry, costly agency call-ins). It also improves employee morale so employees can plan their lives and reduce stress.

5. Invest in the right tech 

Cutting costs doesn’t just mean spending less. It’s about making smarter decisions - the ‘what’, ‘where’, and ‘how’ of spending.

Think about the time you spend on rotas and timesheets, ringing around to find cover, realising payroll errors or being over budget from unplanned overtime or agency costs when it’s too late to change anything. It’s all costing you more money than what could be wisely invested in tools that can eliminate all of this for you. Tools that drive significant, long-term savings and efficiency.

Yes, investing in tech can cost money. But when you have the tools and benefits we’ve listed above, the money a small business can save is second to none.

“We were spending 25% of our turnover on wages — now it’s down to 19%.” Mark Coaker, Operations Manager at Millers Fish and Chips

“Before, we wouldn't find out [we’d gone over budget] until payroll, whereas now I can do it today — I think we saved about £20K last year.” Adam Hutchison, Managing Director at Belmont Healthcare

But how do you know what kind of tech to go for?

To save money, the right tech should allow you to:

• Have more visibility of staffing and spends
• Optimise staff coverage with revenue-based rotas
• Know if you’re under or over budget before it’s happened
• Allow staff access to view shifts, make requests & be instantly notified of changes
• Streamline your time & attendance tracking

Putting it simply, more visibility means fewer errors and overspending. It's easier said than done, of course, with some measures from the Autumn Budget Update becoming live this year. How can you best tackle it?

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