4 Ways to Cut Business ExpensesMegan Totka
Running a business is expensive – your insurance costs are always going up, your cost to travel via an airplane increases each year and your supplies costs always seem to rise. Small businesses are constantly being squeezed by increases in expenses, making controlling costs more important than ever. Take a look at these four ways you can cut business expenses to boost your bottom line.
Lower staffing costs
If your business has times when it’s slower, look at that time period as a way to cut staffing costs. Many employees are happy to take some unpaid time off, so it’s worth discussing with them. You can also consider hiring a spouse to take over a position within the company to keep the money in the family.
If you have specific projects that are short term, look for independent contractors or freelancers for hire. These individuals will not need insurance or training, so hiring them will save you both time and money.
Reduce your office space costs
It depends on the commercial real estate market in the area you live, but you might be able to move your business to an area that is less expensive or negotiate with your existing landlord for lower and better lease terms. It’s always a good idea to use a site like Quote My Energy to compare business electricity and gas prices so you can switch and save.
If you don’t really need to run your business from a commercial location, consider operating from home. Many successful businesses are home-based or mobile businesses.
If you operate a business from home, you can save on business taxes, insurance and utilities. However, there might be bylaw issues that can prevent running a business in your neighborhood so make sure you check before you launch a new company.
Cut vehicle expenses
Don’t let the fear of starting a business keep you from fulfilling your dreams. There is always a solution if you’re determined to find one. If you’re running a business that requires a car, you are familiar with how the cost of vehicles affect your bottom line. Service costs and fuel charges can be extremely high and are an ongoing expense. Buying a heavy-duty truck can cost an arm and a leg, but if you’re willing to drive a vehicle that isn’t brand new, you can find a used car in good shape.
If you’re putting a lot of miles of your vehicle, it’s important to reduce fuel consumption. Hybrid and diesel cars are expensive to purchase initially but often pay off with maintenance and fuel savings. Also make it a point to find ways to travel less. Avoid unnecessary trips and utilize online resources like Skype and Webex to conduct meetings with people in various locations instead of traveling to visit them in person. Consider telecommuting too – it has significant cost-cutting potential – it’s estimated that businesses who let their employees telecommute save around $11,000 per employee.
Use your time wisely
One of the top characteristics of successful entrepreneurs is the ability to use their time wisely. All busy small business owners know about time crunches, which is why it’s important to prioritize to get tasks accomplished. Instead of driving across town to pick up supplies, let a store deliver them for free. Make the most of out your business day through finding effective time management skills. Tracking daily activities and goal setting can streamline the work day and reduce stress at the same time.
There are some unavoidable costs that accompany running a business — every startup has necessary expenses. While it’s impossible to totally eliminate your costs, there are ways you can significantly reduce them with some simple changes to the way you operate.