Reducing costs in your small business and creating processes that will cost you less money doesn’t have to take a lot of time or even a lot of effort. In many cases, it’s about making smarter choices when deciding where to put your small business funds. Even the smallest increase in revenue or reduction in expenses can have an impact on company profitability. From using technology to going paperless, there are ways to cut your overhead without feeling the pinch.
1.Lower Office Space Costs
Depending on the commercial real estate situation in your area, you may be able to take advantage of depressed prices for office space to move your business to less expensive quarters or negotiate with your existing landlord for better lease terms.
Better yet, if you don’t really need to run your business from commercial premises. why not operate from your home or go mobile? In addition to savings on office space, operating your business from home can save you money on insurance, business taxes, and utilities. However, if you are thinking of converting to or starting a home-based business, some preliminary research is required. There may be zoning or other local bylaw issues that prevent such activities in your neighborhood.
2. Technology is Essential
Technology allows us to save money and advance our businesses in ways that weren’t possible even five years ago. From teleconference services and online payment services to open-source software and remote desktop applications, there are many ways you can reduce business costs with technology.
3. Reduce Supply Expenses
Save money on office supplies by contacting vendors to let them know you’re price shopping. Look outside your pool of traditional vendors. Large discount suppliers like BJ’s, Amazon or Wal-Mart can often beat traditional office supply vendor prices.
4. Cut Advertising Costs
With more potential customers online than ever before, advertising does not have to be expensive. Start with building an online presence by creating a website and using social media to reach your market. Email is another highly effective low-cost marketing solution. You can send out news, discounts, tips, and other information to build rapport and keep your market aware of your business.
5. Use a Programmable or Smart Thermostat
Heating and air conditioning aren’t negotiable expenses. Even small changes in your facility’s temperature can adversely impact your customers’ comfort and employees’ productivity, threatening your top and bottom lines. But that doesn’t mean you can’t do everything in your power to save money on air conditioning.
Programmable and smart thermostats can cut your climate control costs without compromising comfort. Use a programmable thermostat to customize your facility’s climate control schedule: at a 9-to-5 office, that probably means increasing the heat or AC in the morning and dialing it back (or turning it off completely) in the evening and overnight. In larger facilities, you’ll need multi-zone thermostats or multiple thermostats to handle climate control needs on different floors or suites.
6. Use Space More Efficiently
Offices have been getting more efficient for years now. According to CCIM, the average new office lease (as of late 2012) had just 185 square feet of dedicated office space per worker. That’s down more than 20% from the beginning of the century. And the trend may accelerate: In a survey cited by CCIM, U.S. executives revealed plans to shrink their footprints to less than 100 square feet of dedicated office space per worker by 2018.
Mobile device usage, collaborative workstations, and multipurpose rooms (for example, conference rooms that double as break rooms) are all great news for rent-conscious business owners and executives. Redesigning your office around these and other space-efficient principles allow you to do more than less – and, even if you’re growing, forestall a move into a larger, costlier space.
7. Create and Stick to a Business Budget
Budgeting goes hand-in-hand with reduced business costs because it’s impossible to make smart financial decisions without a clear idea of the money you have coming in and going out of your business every month. A business budget that you use daily can become a powerful tool for reducing your business costs effectively.
8. Narrow Your Business Focus.
As a small business owner, I find narrowing my business focus to be one of the most effective strategies to improving my bottom line. By limiting the types of services I offer and projects I accept, I am more productive and produce higher-quality work.
Another way to narrow your business focus is to subcontract. Rather than turn away business, maximize your capacity by subcontracting pieces whenever possible. More projects equal more revenue, while subcontracting equals lower expenses. The result is a better bottom line.
9. Tax Planning is Critical
Minimizing your tax bill can be the most beneficial way to improve your business bottom line. This means maximizing all your available business deductions to reduce your tax liability.
Get in the habit of keeping track of all business expenses by saving receipts, and recording vehicle mileage when traveling for business purposes. Hiring a tax consultant to help your business maximize deductions may be worth the cost.
10. Switch to the Cloud for Your Business Computing Needs
For most businesses, cloud computing is an excellent way to reduce both capital costs and ongoing expenses related to IT services. With cloud computing, gone is the need to purchase and maintain expensive servers onsite, as well as pay for ongoing software upgrades. By using the cloud you will always have access to the latest versions of business applications and the flexibility to increase your bandwidth or storage on demand.
Limitless Investment & Capital Outsourced Accounting and Tax Services
Limitless Investment and Capital certified accountants can proactively help your business reduce expenses which will benefit your bottom line. Additionally, hiring an outsourced accountant will cost your business a fraction of the cost of hiring a full-time employee. Outsourcing staff is a great way to reduce your business expenses while benefiting your business. Contact us today to learn more.