- July 3, 2018
- Posted by: Rivero, Gordimer & Company
- Category: Business Advice
When you’re running a small business, every penny counts. Even the slightest reduction in expenses can make a tremendous impact on your business’s bottom line. That’s why it’s important to occasionally take a step back from your day-to-day operations to examine your business practices for inefficiencies. In many cases, you’ll find that a few minor adjustments can lead to substantial savings.
With that in mind, here are six suggestions for how you can reduce typical business expenses and improve your bottom line.
Take Your Marketing Online
Gone are the days when businesses can rely solely on word-of-mouth advertising or repeat business. If you want your business to survive in 2018 and beyond, you need to have an online presence.
Not only is digital marketing becoming more effective than traditional marketing channels, but it’s also one of the most cost-effective. There are numerous online advertising options, all of which have the potential to yield quick results at a fraction of the cost you may be paying for traditional advertising.
For example, you can create a business blog, launch a social media marketing campaign, or start building a customer email list without spending a dollar. By increasing your online presence and communicating with potential customers 24-hours a day, you may see better results despite spending less money on marketing than you have in the past.
Audit Recurring Expenses
It’s easy to set certain expenses on autopilot — many of which offer discounts for recurring contracts. However, long-term contracts with your vendors and other recurring expenses can often become outdated or underutilized over time.
It’s a good idea to frequently assess your recurring expenses to find opportunities to cut services that you no longer need or to find more favorable rates.
Office supplies are common, recurring expenses for businesses. Rather than holding steadfast to your current rates, consider contacting your office supply vendor and let them know you are price shopping. You may find better prices from suppliers like Amazon or Walmart — or, your supplier may be willing to lower their rate for fear of losing your business.
Ditch the Landline
Landlines can be an unnecessary expense for many small businesses. The average cost for a landline is usually $15 to $30 a month, and that’s just for the basic service. Add in caller ID, call waiting, and voicemail and your price climbs even higher. And don’t forget about taxes and fees.
While traditional telephone lines tend to sound better and experience fewer dropped calls, they might be an unnecessary expense for your business. If you don’t need to conduct business meetings over the phone regularly, consider using your cell phone, VoIP and virtual phone lines instead of a traditional landline to save some money.
If you’re really looking to get aggressive about cutting costs, you should consider going paperless. While the cost of paper, ink, and other office supplies may seem nominal, they certainly add up. Over time, these little purchases can become a major expense.
Many small businesses have “gone paperless” to cut costs and position themselves as environmentally-conscience. With readily available technology, going paperless isn’t nearly the obstacle that it once was. Now small businesses can easily store important documents on a hard drive or in the cloud, rather than stuffing them in a filing cabinet.
Not only can transitioning your company to being paperless lead to cost-savings, but it can also increase your efficiencies. Searching client records and sharing important details is much easier and safer electronically.
Eliminate or Optimize Your Space
Does your business have a physical location? Then you know how expensive that can get. In fact, it’s often the most expensive part of running a small business. Unfortunately, the immense expenses that come with maintaining a brick-and-mortar location are difficult to avoid. But, you might consider downsizing your retail location or eventually converting your business to a home-based business to save money.
Downsizing your physical space or eliminating it completely might not be a viable option for your business. In that case, look at the way you are using your space currently. Is your storage overflowing with supplies and disorganization? Does your layout improve or hinder production workflow? Can you use your space for dual purposes?
Obviously, your options will vary depending on the nature of your business, but it’s certainly worth it to look at consolidating or rearranging to optimize the use of your space.
Make the Most of Your Employees
As a small business owner, some of your most valuable assets are your employees. Make sure you are constantly evaluating how you use employees in relation to their experience and skills. Giving responsibilities to employees who have the most skill and efficiency for the job is a great way to ensure you are getting your money’s worth as an employer.
Running a small business requires taking risks — many of which are financial-based. If you run a small business, try adopting a cost-conscious approach to your operations. Even if you’re not immediately able to reduce costs, you will be more mindful of your expenses and efficiencies.
If you’d like to talk to a financial professional about your small business’ expenses, contact the Tampa CPA Firm, Rivero, Gordimer & Company.