Best ways to save on business expenses

Best ways to save on business expenses

There’s no such thing as a free lunch, but there are ways to keep business and travel spending in check.

In any economy—good or bad—one of the smartest moves small-business owners can make is to constantly monitor expenses and figure out new ways to lower them. To help you out, here are some of the best ways to cut spending while still investing in your company’s success.

 

Travel Light

With ever-rising airfares and hotel rates, business travel quickly eats up cash. Cut costs by avoiding business travel when possible. Instead, use videoconferencing or conference-call technology to virtually meet with your prospects, customers and partners.

Travel rewards programs generally offer the most benefits when you stick to the same airlines and hotels, and when you book directly with the airline or hotel instead of through a travel website. If your business travel needs don’t allow for this—for example, if you regularly travel all over the world and have to use a variety of different airlines, or if you stay in cities with a limited selection of hotels—save money and time by using online travel tools to find the lowest rates for your next business trip and best ways to save on business expenses.

 

Independent Thought

You may not think of them as an expense, but employees and their associated costs are the biggest spending category for most small-business owners. If it’s feasible for your business, consider outsourcing some tasks to independent contractors or freelancers. The costs of employee benefits such as health insurance can add about 30 percent to an employee’s annual salary or wages, but independent contractors don’t receive benefits, which can save you a lot of money right off the bat. (Talk to a tax expert or accountant first to make sure the people you’re planning to hire as independent contractors aren’t defined as employees by the Internal Revenue Service, otherwise you could face hefty fines during a tax audit)

Do you have workers in multiple locations or employees who travel a lot for business? Petty cash isn’t the only solution when employees need to make purchases without your approval. Keep employees’ spending under control using a prepaid business credit card, which allows you to give employees a set amount to spend and restrict what they spend it on. You control the cards’ limits and can change them anytime online.

 

Cut Overhead

Otherwise known as operating costs, overhead includes the ongoing expenses that are necessary to run your business but aren’t directly associated with your product or service. These typically include rent, materials and utilities. Overhead expenses can quickly eat up money. Fortunately, there are many ways to trim overhead costs. Try these:

Let your employees work from home at least occasionally. If you let everyone work from home on the same day or days of the week, you’ll save money on utilities at your business during the days when business is slow or off-peak periods. Automate your business processes and invest in simple, cost-effective technology that allows you to keep the remote team connected, which offers group chat and instant messaging along with screen sharing and file sharing.

Do you have extremely visual projects that require collaboration, or is brainstorming an important part of your business? Perhaps you own a web publishing firm, interior design business or wedding planning company? Use technology which lets users upload and review materials, including photos and videos; provide feedback; take notes and draw ideas on a virtual “whiteboard,” all in, yes, real time.

Save on bills. Utilities are most likely a big part of your overhead. Most small businesses waste energy and other utilities without even realizing it. Look for creative ways you can cut costs.

Consolidate. Would you like to wrap all your workspace costs into one simple payment instead of dealing with separate bills for rent, utilities, Internet access and more? Or maybe your business is such that you don’t need a dedicated, full-time office at all, but working from home isn’t quite right either. Check out co-working spaces in your area or office space providers. These offer a wide range of options, from the use of a full-time office with phone, mail, Internet and reception service to as-needed use of offices or conference rooms.

 

Don’t Miss Miscellaneous Expenses

When it comes to expenses, little ones can add up to a lot. There are a lot of simple ways to cut costs that can result in big savings. For instance, you may be able to barter for products and services with other businesses instead of buying. If you own a website design company, you might provide free design services for a public relations firm in exchange for its providing you with free PR services. You can barter directly with businesses you know and trust. If you barter on an individual basis, be sure to put the terms of any trade agreement in writing. And remember, the tax authorities consider bartered goods and services taxable income.

Another good way to cut back is to rely on the cloud. Storing documents and data in the cloud saves on paper, ink cartridges, printers and file cabinets—not to mention helping the planet. Cloud storage options such as Dropbox and Google Drive offer free cloud storage that’s more than adequate for most small businesses’ needs, but if you require more space, you can upgrade to paid versions.

It’s also important to review your business insurance policies annually. Many entrepreneurs renew their policies every year without question. Instead, meet with your insurance agent or broker to discuss ways you can cut costs while keeping adequate coverage. For the greatest savings, it’s a good idea to work with a broker who represents multiple insurance companies rather than just one. They can help you compare policies to get the best rate for your business.

 

You might like this “keys to managing your money”

Like our article”Best ways to save on business expenses”? kindly drop a comment.

Related Articles

financial advisor This is a good discussion that could easily make it into a full article, however, for many companies especially SMEs this is

Bookkeeping In aligning business strategy with financial management, regular bookkeeping is the foundation for the entire process as informed decisions cannot be made without

Should I in-source or outsource my finance function A common question I’m asked is whether to outsource or directly employ a finance team. My

Contact Us

Address

17 Military street, Onikan, Lagos Island, Lagos, Nigeria.

Phone

+234 703 417 2590

Email

info@midridgeinternational.com

Subscribe Now For Exclusive Offers And Updates!

Subscribe to our newsletter for the most recent blog posts, promotions, and updates delivered right to your inbox.