How to Reduce the Overheads of Your Startup

How to reduce the overheads of your startup

Starting a business can cost thousands of pounds, even if the business is relatively small. The cost could be hundreds of thousands for larger companies that need heavy or specialist equipment. In the UK, the average startup cost is £5000, with the business spending a further £22,700 in their first year. As such, if you run a startup and are looking at ways to reduce your overheads, here are a few things you may consider first.

Rent instead of buy

A key way to reduce the overheads of your startup is to rent instead of buy. This relates to all aspects of your business, from equipment to office space which results in no high upfront costs which are essential for a new business with low funding. Renting gives you the flexibility to upgrade or return the item as your business changes, which it inevitably will, and removes the issues that may arise regarding repairs and maintenance.

Be greener

The average SME can reduce energy bills by 18-25% by installing energy-efficient measures, so making your business model more environmentally friendly is an effective way to reduce some of the costs associated with your startup. With the rising energy cost in the UK, reducing your energy consumption could greatly impact lowering your overheads. 

Green energy

There are multiple ways in which you can lower your energy consumption, from making your office more energy-efficient by adding a wall or roof insulation which aids in reducing heat loss in the building to replacing lightbulbs with LED lights and optimising your IT equipment. Your startup could also look to implement go-green initiatives for employees such as promoting car sharing or cycling to work if you are office based.

In 2023, 66% of consumers say they consider the sustainability of a company before they make a purchase, so becoming more eco-friendly could also widen your customer base and result in increased revenue while saving you money on energy bills.

Consider going remote

If it is viable for your business, moving your workers to remote contracts can help reduce your overheads. If your business currently functions from an office based in a city, you will likely find that your rent is very high. In the UK, the average price for renting a hot desk in a shared space is £260, increasing to £460 for a desk in a private office while London prices reach £617 on average. As such, eliminating the costs associated with renting office space could be an ideal way to reduce your operating costs significantly.

If remote work isn’t a possibility for your business, you could consider moving your office elsewhere, such as Newcastle where office rent is the lowest, or to the outskirts of London if you want to stay local. 


Outsourcing is a business practice where an organisation hires external workers in areas such as IT, marketing and HR which avoids the business hiring internally and, for startups, this is a great way to reduce costs. 

Outsourcing can save large amounts of money as it allows for more control over costs as you pay for the services when you need them. This means that you are not required to hire, train and provide benefits and an annual wage to an employee and can instead pay for what you use. It also allows for better time management of your staff which is particularly important when considering the multitude of roles that employees have to cover when working for a small startup. Hiring externally will also make your business more flexible as it allows adaptation to change market conditions and challenges which is key when running a growing startup where things can develop quickly.