Minimizing business expenses pays off
Find out which business expenses you can easily cut to save money.
What if you could get your hands on a pile of cash for your business? There's a simple way to do that: reduce your expenses.
What's more, getting started is easy — you just need to know where to look. Here are some pointers on how to find expenses you can cut that could save your business money.
Slash utility bills
Perhaps the largest utility savings can come from adjusting your heating and cooling systems. Even small moves, such as installing a programmable thermostat and adding tinted window film to keep the hot sun from driving up cooling bills, can reap benefits. Also, consider upgrading your HVAC system with a newer, more energy efficient one if it's more than 10 years old.
Take a moment to think about how many of your employees leave desktop computers, printers, and copy machines running overnight. When equipment is not being used you can set it on hibernation or sleep mode and use less power. Outlawing screensavers can also help — a PC left on with a screensaver uses over 10 times the wattage of a computer in hibernation mode. And don't forget to look for the little ways to save on electricity, such as turning out lights at night.
To get more tips on identifying building equipment and systems that can be maintained and updated to save energy, check out the U.S. government's energy savings guide designed just for small businesses.
It pays to actively investigate. Take a look at your telecommunication service and bills on a regular basis — such as every six months — to make sure you're not being overcharged for minutes you don't need on wireless plans, unauthorized services, or hardware you may be renting without realizing it.
Also, consider asking your provider about discounts for bundling your internet, telephone, and wireless plans. Sometimes prices are dropped or there's a new offering, but you typically have to ask for it.
For computer servers, consider cloud offerings rather than physical computers located in your facility. You get a triple benefit: no hardware to buy, lower energy consumption, and lower staffing costs to maintain and upgrade systems. Most cloud options vary in costs since you pay only for what you need. And keep in mind that because there are a lot of choices in cloud computing these days, there may be room to negotiate.
Review credit card statements
Credit card statements are a gold mine for finding expenses to cut. Carefully review your statements every month to identify any recurring charges and subscriptions you no longer need. If you happen to find any unauthorized charges during your review, it's best to dispute them immediately.
To analyze your credit card statements quickly and easily, consider signing up for online banking. Having this information right at your fingertips allows you to categorize expenses, improve cash flow and plan for future business needs.
Think beyond your current expenses
Here are a few tips that can help you cut back on some of those business expenses that may not be as obvious:
Go "greener:" Try to avoid printing documents unless absolutely necessary — you'll reduce waste and spend less on paper, ink, and toner. Also, instead of water bottles, try a faucet filtration system in the lunchroom.
Rent office space: If you have extra office space, check your lease or ask your landlord if you can sublet to other tenants. If you do decide to sublet, try sharing printers, copiers, fax machines, and other office supplies with your tenant to save money. Just remember to incorporate such expenses in the rental fee you charge.
Hire contractors: Hiring contractors lets you pay only for time as needed. Consider contractors for short-term projects and administrative work like bookkeeping and payroll. Virtual assistants are also a growing trend and typically work for multiple clients, charging by the hour.
Remember: it helps to be proactive about managing expenses. If you're having trouble thinking of expenses to cut, work to uncover them by closely evaluating each expense area. You might be pleasantly surprised by what a positive difference these efforts have on your bottom line.
Explore more tips for streamlining your budgeting process.