Are you worried about the skyrocketing business costs? Don’t worry, you are not the only one!
When it comes to small businesses, one of the biggest headaches is the ever-increasing business costs. In such situations, businesses often tend to look back on their financial statements. While this is an excellent way to start, it can almost always become overwhelming. After all, it’s not easy to make sense of balance sheets, cash flow projections, revenue charts, and profit and loss statements.
This is why you can start at the grassroots level by identifying and cutting down unnecessary expenses. For instance, if you have just started, you can operate your business from a home office instead of renting a full-fledged office space. Once such unnecessary expenses are sorted, you can move on to cutting down on other costs to keep your business afloat.
Here are six ways to reduce your business expenses:
Yes, outsourcing isn’t exclusively for MNCs or large companies. As a small business, you too, can take advantage of outsourcing to reduce staffing costs. Outsourcing services like oDesk, Elance, and Freelancer can help you connect with and hire skilled and qualified professionals in various domains (web development, software development, accounting, etc.). Also, since these services compete for business from small businesses, the pricing is highly competitive.
Say no to perpetual payments
Perpetual payments refer to the ever-continuing stream of cash payments made out to other businesses for specific services or assets. While you cannot avoid all perpetual payments (case in point, Internet and phone services), you can definitely avoid some. For instance, if you are renting a company vehicle/manufacturing equipment, etc., you have to pay rent charges every month. However, if you buy your own company vehicle, you will save much on rent while also enjoying the tax benefits of depreciating assets. It is always sensible to purchase amenities rather than leasing them.
Go for bulk orders
Running an office requires supplies in many forms. While it may seem wise to order as and when you need stuff for your business, always remember that bulk orders allow you to save a lot of money over time. Although you will spend a substantial upfront cost, you will pay a lower cost per item rate, which is always beneficial.
Try to negotiate a lower APR on credit cards
Credit cards are something business owners cannot do without. In fact, small business owners use credit cards to acquire working capital, make minor purchases, pay for travel expenses, and other costs as and when they arise. Credit card APRs (annual percentage rate) is often very high and end up costing you a ton of money. This is where you can get crafty with your credit card provider and negotiate for a lower APR for your credit card. Even a minor reduction in APR will help you save money in the long haul.
Cut down advertising costs
With the online domain prospering like never before, it presents an excellent opportunity for businesses to cut down on advertising costs. Instead of paying a significant portion of your revenue to ad agencies, try to leverage social media platforms and online channels to your benefit. Use tools like Facebook, Instagram, LinkedIn, and Twitter to increase your brand awareness. You can use these channels and even emails and texting to advertise your products/services.
Keep your tax bill at a minimum
By taking a proactive stance, you can minimize your tax bill to a great extent. This will require you to keep track of all business expenses, saving business receipts, recording vehicle mileage and business travel expenses, and basically anything that can be deducted. The higher you maximize your tax deduction, the lower is your tax liability.
If monitoring and managing your business taxes are too much (since you have to manage a business!), MyTaxFiler is always ready to serve you!