14 Ways to Lower Business Expenses
There are a few steps you can take to reign in your business expenses. Often, costs take on a life of their own and begin to really eat away at profits if you don’t take care to control them. Sometimes, a business’s inner workings can become so complicated that we overlook the simple and obvious changes we can make to improve our business practices. “A penny saved is a penny earned” could not be any more true. The following are some common ways to lower business expenses. Put them into practice and you’ll see a noticeable difference in business.
Start comparison shopping all your supplies, from the printing paper all the way to the toilet paper. Have an estimate of the amount you hope to save on a monthly basis and give it to give your office manager. Also, comparison shop for vendors you work with regularly, whether it’s a marketing company or the water cooler guys. You may consider going with a less expensive company or get your current vendor to drop their rates. This is your moment to jot down every penny that is spent in the name of the company and see how wasteful you’re being. Getting rid of the bloat will leave your business in much better shape. Your wallet will love you for it too.
Create a Business Budget
Everyone has a budget but it’s highly advisable that you create a daily business budget that tracks how much money comes in and goes out. After tracking this information for a few weeks or months, you’ll come to expect spikes in spending. See if you can lower those expensive or cut them if they don’t seem to be contributing to any success. This is the best way to immediately cut useless expenses or find cheaper alternatives with very little effort.
Do you really need to be situated in the airy loft overlooking the ocean? Can you use Google Drive instead of paper and printer? Can you save in electricity by switching to laptops instead of using desktop computers? Can you shut down the lights in the conference room and kitchen when they are not being used? Can you use e-signatures or go digital with your invoices and phone service? If you answered yes to any of these questions, you’re on your way to savings.
Comparison shopping for your business insurance is one step you need to take right away. Many business owners benefit from bundling their business insurance with their personal insurance. Using a resource like SmartFinancial will help you see what other rates are available to you without too much time spent on hold on the phone with various carriers. Make sure you’re not over-insured or under-insured. Be careful not to opt for duplicate coverage.
Yes, there is such a thing as healthy debt and investments that need to be made. For instance, it’s often necessary to buy leads from a lead generation company if you’re an insurance agent or a real estate agent. However, you’ll want to avoid charging business expenses to your business card if it has high interest rates and fees. Just as with your personal line of credit, you’ll want to reduce your business’s credit card debt. This is an important step in maintaining the health of your business accounts.
Analyze the cost-effectiveness of all your campaigns to see which mediums are working best for you. Consider the expenses of direct mail (paper is costly) and advertising in local publications.. You may find that certain traditional forms of marketing may need to take the backseat to, say, digital varieties of messaging. Using social media and email campaigns and newsletters may be cheaper than ads in newspapers, circulars, etc. Crunch some numbers and reinvest your advertising money. You may find that networking yields better results than advertising too.
How are you using your time? Do your days feel inflated with meetings? Are these meetings doing anything for you or are they a big time-suck? It’s important to gauge how many hours a day you allot for different tasks and evaluate whether or not this is the best use of your time. Time wasted is money wasted. The same goes for the employees you manage. Paymo and Toggl are apps that track time usage to figure out where to scale back or increase hours. It takes time to evaluate which activities are yielding the most dollars and some things simply have to get done. Make sure you’re assigning the least valuable tasks to the lesser paid employees. Examine the different tasks at hand and your options in terms of human capital. You may need to shuffle your employees’ responsibilities to maximize your talent pool.
Find Your Focus
The narrower your focus in whatever industry you’re in, the more specialized you can be. In fact you can turn business away or contract it out. This way, you’re making a slim profit, which is better than no extra profit. Whatever you do, don’t take on more than you can finish unless you are subcontracting your products or services.
Can you consolidate and rent out excess space in your office? Can you use your storage room to house the fax and copy machines to make room for more people? Depending on what kind of business you have, sharing space or using your space for dual purposes is a great way to conserve and save money. Many companies operate remotely for cost efficiency. Is your business able to go that route? If not, can you downsize your physical space or move to a less expensive office space. If you have a retail location, will a move work better for you by creating more foot traffic?
Business associations often offer discounts to members for various business needs. You may get discounts on printer ink or even the rental car you need to use each month. You never know how many useful discounts may be at your disposal unless you ask questions. If you don’t belong to a trade association, do your research because the initial cost will be worth it in the long-run.
There’s no need for physical paychecks, not even paystubs. Rarely do we need to print things out anymore, and Google docs is the perfect way to share documents. Even invoices to vendors can be digital. The cost of paper, ink and mailing supplies can be a really large expense.
Barter When Possible
Do you need certain goods or services for the work you do? Have you ever tried bartering for another’s services or goods instead of paying cash for these costs? Keep in mind that the IRS still taxes bartering so keep a clear record of your barter transactions.
No, internships are not slave labor. There’s nothing more helpful to a young person than a chance to add some real-world experience on their resume. In exchange, the intern(s) can take over some of the administrative tasks that take up valuable time but don’t require much skill.
Cut the Phone
No one needs a landline anymore. Not only is it outdated, it’s an extra expense with no rhyme or reason. There are free VoIP services available. Besides, don’t people just give out their cell phone numbers these days?
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Most companies cannot afford to have theft and crime-related losses affect their bottom line. An essential step that businesses should take to protect themselves is to purchase a commercial crime insurance policy.
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Most businesses have general liability insurance because accidents happen. They happen even more the bigger your company is.
If you are a business owner, you will need to make sure that you have an adequate amount of business insurance to protect both your personal and business interests.
Quick and easy tips that every business owner should be doing.