Reducing expenses in your small business and creating processes that will cost you less money over time 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.
- Use Technology
Technology allows you to save money and advance your 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.
- Go Paperless
The cost of paper, ink, mailing supplies, and postage may seem minimal at times, but it can add up to a large business expense. Going paperless by not printing unless necessary, transitioning to a digital invoice and bill payment system, and filing all important paperwork on your computer instead of a file cabinet can help you reduce some of the most common recurring business costs.
- Start Marketing Your Business Online
If you have yet to jump on the internet marketing world, you are missing the potential of fast-paced, high-result, low-cost marketing. You can start with a business blog, social media marketing, or other online advertising and have the potential to see a relatively quick response with very minimal business costs.
- 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.
- Cut Back on Software
How many software/applications do you use every day? There are probably a few applications you have on your computer right now that you have never used or very rarely use. You can reduce your business costs by only purchasing the software you really need and avoiding the cost of purchasing other apps, plus any upgrade fees necessary to keep the software current. Open-source software alternatives to brand name applications are also an effective way to reduce your business costs.
- Train Your Staff to Exercise Financial Discipline
Do your employees negotiate prices with your vendors? Do they overuse their expense accounts? To help them understand the benefits of controlling expenses, you might hold training sessions periodically to discuss the areas in which they can exercise financial discipline. You can encourage a thrifty attitude in your workplace by offering incentives to employees who find new ways to lower expenses.
- Track Your Expenses Diligently
Start by taking a record of your expenses over the past several months to better decide where to make cuts. Having accurate data is key to the success of this strategy for reducing business expenses.
- Take Every Tax Deduction Available
Many of your business expenses can turn into deductions at tax time. Be prepared to claim tax deductions for all the professional fees you paid through the year, including to attorneys and accountants. Employee wages are tax deductible, as are the costs of your inventory. Other deductible business expenses include advertising, rent, office supplies, and utilities. Even half of some travel or entertainment expenses count as tax deductions.
- Outsource Accounting
How do you create a well-informed, strategic, and achievable path to success? How do you avoid big accounting costs? Where do you get the information you need to lead your business into the future? And what do you do if this data isn’t reliable or giving you the full picture? If you’re experiencing financial blind spots or see areas of improvement that will help you achieve your goals and reduce costs, it could be time to consider outsourcing your accounts.
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