This week we look at steps you can take to review your business premises costs as part of the Isle of Wight County Press's cost-of-living crisis campaign with NatWest to help support SMEs.

Whether you can negotiate with landlords, or even move your business online, taking stock of expenditure associated with your business premises could help weather the storm.

Review your premises

• are your premises the right size in a cost-effective location?

• is every square metre used profitably?

• could you conduct more business online?

Evaluating your business space is a good first step towards determining whether you may be able to negotiate cheaper rent or, if you’re locked into a lease, how to use the space you have more efficiently.

Every square metre of space should be profitable, so identify ‘dead’ space and think of ways to utilise it better. City centre premises are convenient but aren’t always cost-effective and it could be a good time to consider whether some of your business could be moved online, where the costs of location don’t apply.

Negotiate with landlords

• can you ask for a temporary reduction in rent or change the lease terms?

• are you able to sub-let part of your space?

• could you get a discount if maintenance has to take place?

Negotiating with your landlord can help lower your business costs in the short term. During Covid, many landlords agreed to temporary rent reductions, and in the current inflationary climate commercial landlords might again be open to altering their terms in order to retain tenants.

Before meeting your landlord, be prepared to explain why you are requesting a temporary rent reduction and have figures available to back up your request.

Also, be open to other suggestions, such as an alteration of your lease terms, sharing your space with another business, or allowing the landlord to carry out essential maintenance while you are in situ, in return for a reduced rent during that period.

Review your opening hours

• are you losing money at certain times?

• can you work from home on some days?

• would ‘by appointment only’ or a shorter week work for you?

Reviewing costs and income during opening hours can help you discover if your business is consistently underperforming at certain times. For instance, if your costs to open on a Monday are consistently higher than your income on that day, it may be worth closing on Mondays or working from home.

Alternatively, depending on your type of business, you could offer your services ‘by appointment only’ to ensure your income is guaranteed on less profitable days.

Use cheaper electricity. Consider consuming more of your energy at night when it is cheaper. A multi-rate business energy contract, sometimes called an Economy 7 business tariff, offers a lower tariff for seven hours during the night.

However, the peak rate during the day is likely to be more expensive than a fixed tariff, so you need to think carefully about whether a dual tariff will save you money.

It won’t be right for every business, but this solution may be worth it if you can operate out of normal working hours, or if you consume a lot of electricity during the night – charging electric fleet vehicles or topping up storage heaters, for instance.

Next week read how negotiating with suppliers could help you save money.