In business, the general rule is to increase your profits. But, in a day and age where the world has only truly begun to recover from the 2008 financial crisis, boosting profits and bringing in more business may prove impossible without cutting expenses. To help you do just that, we’ve compiled a list of 7 ways you can cut your mounting business costs.
1. Find Cheaper Office Space
According to data collected by The SquareFoot, a commercial real estate leasing marketplace, $5,000 a month will get you a 921-square-foot office in San Francisco and an 811-square-foot office in New York. In other words, office space can be super expensive, especially in big cities. So, it is probably a good idea to consider relocating your office to outside the city where rent is considerably cheaper.
2. Cut Your Tax Bill
Sadly, many companies don’t realize they’re entitled to certain tax deductions and end up paying quite a large tax bill. In reality, you could claim deductions for things like business travel, advertising, employee wages, maintenance, and even gifts for customers. As a small business owner, it’s a good idea to hire an accountant or tax preparer who will no doubt help you save a dollar or two.
3. Pay Invoices Early
There are two main reasons why you should pay your invoices early. One, expenses will start piling up, and you might have difficulty settling your debts; and two, by doing so, you might get a discount. Many suppliers will often offer business clients a 2% discount if the invoice is settled within 10 days. It might not seem much, but before you know it, you’ll be saving potentially thousands of dollars every year.
4. Curb Travel Expenses
Traveling for work is an unavoidable part of business, but you’re now in a position to drastically reduce your travel expenses. Twenty, thirty years ago, you were expected to fly to clients outside of the country to conduct meetings; today, you can do it in the comfort of your own office through video conferencing. You end up saving a hell of a lot of money on flights, hotels, and sometimes even meals for employees. But, when you do have to travel for business, make sure that you opt for less expensive flights and hotels.
5. Hire Interns
College students and recent graduates often turn to internships to start their careers and will often work for a small fee or nothing at all, which is great for you, especially if you want to cut business costs. Rather than hiring temps who can be expensive, particularly if you go through agencies, you could bring in college students to do all the paperwork and complete any hands-on tasks. After all, it’s a win-win situation for both parties: you ensure the extra work gets done at little to no cost, and the students get work experience and school credit.
6. Go Green
More and more companies are recognizing the benefits of going green, and it’s not just saving the planet. It’s also saving money. Reducing paper waste, turning off peripherals when not in use, and switching to fluorescent lighting to save electricity all make a significant contribution when it comes to reducing your carbon footprint but it also reduces the dollar amount on expenses.
To put that into perspective, 30 incandescent light bulbs will cost you over $300 a year while fluorescent lighting will only cost you a little under $80 with a lifespan of 8,000 hours. You could even opt for LEDs which cost an estimated $32,85 per year with an average lifespan of 50,000 hours. Bottom line: greener is better.
7. Let Your Employees Work From Home
As we mentioned earlier, office space can be expensive, but rather than looking for somewhere cheaper, you could instead opt for an entirely remote workplace. In other words, ditch the office and send everyone to work from home. This way, you’ll reduce expenses like rent, electricity, and maintenance, but saving money isn’t the only reason why you should let employees telecommute. Research shows that employees who work from home are happier, more productive, and less likely to quit, and you’ll also attract more talent.
See Also: How to Run a Cost-Effective Business
What other ways can you think of to help cut business costs? Tell us in the comments section below, and don’t forget to share this article with fellow entrepreneurs!