• are your premises the right size?
• are they in the most 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. With energy prices rising, it’s essential that every square metre of space is necessary and profitable, so identify ‘dead’ space in your premises and think of ways you could utilise it better. Consider whether your business could base itself in a cheaper location, too. City centre premises are convenient but aren’t always cost-effective.

Also, depending on your industry, it’s a good time to consider whether some of your business could be moved online, where the costs of a bricks-and-mortar location don’t apply.

• can you ask for a temporary reduction in rent?
• are you able to sub-let part of your space?
• can you change the lease terms?
• 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 the Covid-19 lockdowns, many landlords agreed to temporary rent reductions, and in the current inflationary climate, with businesses moving to hybrid working models, commercial landlords might again be open to altering their terms in order to retain tenants.

Before meeting with 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. 

• are you losing money at certain times?
• can you work from home on some days?
• would ‘by appointment only’ work for you?
• could you employ a shorter working week?

Reviewing costs and income during your opening hours can help you discover if your business is consistently underperforming on certain days, or during certain hours. 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.

• shop around
• offer larger deposits for a bigger discount
• be professional, but be prepared to walk away
• be flexible with your terms

Negotiating discounts and cheaper prices from suppliers can help offset rising energy costs. Always shop around before you start negotiations, so you’re aware of what other suppliers in the market are charging.

Make sure suppliers know you are someone who will give them repeat business over the long term, and if you have a track record of past purchases, let them know how much business they can expect from you based on those purchases. If you’re just starting out, provide them with a sales projections plan. Often, offering a larger initial deposit to a supplier will result in lower overall prices, so be flexible. If a supplier isn’t able to offer the price you’re looking for, be professional, but don’t be afraid to walk away and try another supplier.

Another way to reduce property costs is by 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 actually 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.

Read more about renewable energy.