Owning a small business comes with a variety of perks and challenges. However, it can take trial, error, and a lot of time to find the best ways to reduce small business costs. In the early years, starting a small business can be overwhelmingly costly. Mistakes will be made, but why not learn from the stumbles of those that came before you?
Particularly in the digital era, there are more ways to save as an entrepreneur or small business owner than ever before. Here are the five biggest ways to keep more cash in your hands:
- Ask yourself if you really need a brick and mortar establishment. There will always be businesses that need a tangible location, such as restaurants. However, a physical location is one of the most expensive overheads. Considering going virtual and offering telecommuting to your employees. Not only will you save big on just about everything, but telecommuting is a huge perk for many top-ranked candidates.
- Monitor your electricity usage. If you can’t give up a brick and mortar establishment, keep an eye on electricity usage. It’s one of the biggest money sucks of any business, from keeping the exterior lights on 24/7 to employees not taking the same energy-saving approaches in your business as they do at home. Replacing bulbs with energy-saving options as they burn out, utilizing natural light, and installing energy-saving appliances as budget allows are all great ways to keep that pesky utility bill in check. (However, do remember that such expenses are a tax write-off!).
- Keep on top of tax write-offs. Electricity is just one example of a tax write-off for businesses. Write-offs can help get you into a lower tax bracket, and having a good CPA in your corner is vital. Many people are shocked by what they can write-off, from entertainment to various travel expenses to parking and office supplies. Tax laws change every year, and it’s critical that you save every receipt and track every expense.
- Go paperless. Shifting to a paperless environment isn’t just an eco-friendly move, but it can also save you a lot of time, trouble, space and headaches. Printing costs can be astronomical, as can storage spaces to keep all those hard copies. You’re also more likely to indulge in “double work” if you use hard copies because information can get lost or duplicated. You’ll save costs not just with printing and space, but also with your employees’ time (which, of course, translates to fantastic cost savings).
- Consider bartering services and hiring freelancers. Hiring permanent employees is expensive, whether they’re part-time or full-time. Laws vary by state, but you’re likely required to offer them healthcare, paid leave, pay half of their Social Security and Medicare costs, worker’s compensation insurance, and a variety of perks. Depending on the state, you might also get stuck with them if the relationship doesn’t work out. Bartering is a great way to save, such as swapping your company’s bookkeeping services for another professional’s website services. Hiring freelancers and contractors usually means you pay them a higher salary or hourly rate, but you can end the relationship at any time and aren’t required to pay any benefits to them.
Saving money as a business owner is a big part of a healthy business plan. Particularly for newer and very small businesses, it can make the difference between shuttering the doors and thriving. The more you save, the more you can invest in your business.
Trevor is part of the content marketing team for Power Target. He enjoys using his talent for words to help educate others. In his free time, you can find him writing for different publications or outside enjoying about any type of fitness activity imaginable.