There may come a time when you realize your business expenses are out of control. Even if this day has yet to arrive, there is nothing wrong with taking a big-picture view of your current budget. You may be surprised at what you find. If you neglect to control your spending, if you are unsure of where all your profits are going, there could come a day when you have to downsize or take some other type of drastic measure. Here are some of the most common business expenses, many of which could be dragging your organization down:
- Auto expenses
- Promotion and advertising
- Trade shows and seminars
- Credit card interest
- Office supplies
- Bank service charges
You get the point. There are many expenses that can hold your company back from saving money.
While some expenses are necessary, others could be eliminated entirely. Your job is to pinpoint which expenses are important and which ones should take a backseat for the time being. If you want to save cash for your business every month, the following nine strategies can help:
1. Search for Cheaper Rent
If your rent is too high, you have two options:
- Find office space that is more affordable
- Negotiate a lower price with your current landlord
If you are unable to negotiate a better deal, it may be time to pick up and move. Yes, this is a big decision. And yes, it will take a bit of time to find a new place and complete the relocation process. Even so, when everything is said and done, you will be glad that you made the switch. You could save hundreds or thousands of dollars per month by seeking more affordable rent.
2. Opt for Freelancers
Are you in the process of hiring for an open position? As tempted as you may be to search for full-time help, this may not be the right move. With more than 50 million Americans working in some type of freelance capacity, you won’t have to look far to find qualified help. There are many financial benefits of hiring freelancers instead of employees, including:
- Lower wages
- Not required to provide benefits
- Don’t have to provide them with equipment or office space
If you have yet to consider this idea, now is the time to do so. With the freelance economy taking off, this could be the perfect arrangement for your company.
3. Use Technology
Many companies shy away from technology because they see this as an additional expense. Others, however, have come to find that spending money on technology actually allows them to save in the long run. For example, you could use an instant messaging platform, such as Skype, to communicate with clients and prospects all over the world. Imagine how much money this could save you on travel. Or maybe you can implement technology that brings your remote workforce together, such as a business dashboard application or workflow management tool. Also consider some of the top tech tools, as ranked by small business owners.
4. Buy in Bulk
Just the same as you would for your family, don’t overlook the benefits of buying in bulk for your business. Is it cheaper to buy office paper and printer cartridges in bulk? You may spend more upfront, but you will save hundreds of dollars over the course of a year. In addition to office supplies, there are other things you can buy in bulk, such as products for the break room. Think about items such as coffee, plates, and napkins.
5. Think Twice Before Expanding
Don’t measure your success based on how many employees you hire in a given year. This could lead you down a dark path that costs you a lot of money. Many small businesses are successful with only a few employees. Think twice before bringing new employees into the fold. This means another salary, more benefit expenses, training costs, and much more. Before you hire, ask yourself this question: is it possible for a current employee to take on more responsibility? Even if you have to pay this person more, it is still cheaper than hiring a new worker.
6. Track Miscellaneous Expenses
There are some expenses that are hard to overlook. For example, you will never forget about the rent payment that is due every month. But there are also some that slip through the cracks, month after month. It is imperative to track miscellaneous expenses, such as meals with clients. These can quickly add up and tracking them will be important come tax time. The best way to track these expenses is to save all receipts and to review your business credit card statements at the end of the month. There are a number of apps that can help you.
7. Switch to a Low Interest Credit Card
There is nothing wrong with using a business credit card. In fact, this is a great way to organize expenses and earn reward points. On the flipside, a high interest credit card could cost you a lot of money every month. If you neglect to pay your balance in full, interest charges can quickly add up. For businesses that spend thousands of dollars every month, an interest charge of $100 or more is not uncommon. If you are tired of paying a high rate of interest, seek a low or no interest credit card. It’s not difficult to transfer your current balance to another card. All you have to do is find one that suits your finances and then make the change.
8. Avoid Offsite Meetings
As tempted as you may be to schedule an offsite meeting, don’t do this on a whim. Do you really need to take your entire team out to dinner when you could accomplish the same thing in your office? This may be more enjoyable for everybody involved, but it is also a large expense. And while impressing potential clients is important, think twice about spending on lavish lunch or dinner meetings before you know they have real interest in buying. If you find yourself scheduling offsite meetings on a regular basis, it could lead to thousands of dollars in unnecessary expenses over a period of 12 months.
9. Shop Around Before You Buy
It doesn’t matter if you are seeking new office space or buying supplies, shop around before you make a final decision. You never know what you will find until you compare all your options. You never know just how much you can save until you know exactly what is out there. The internet makes it simple to comparison shop, no matter what is on your list.
Answer these Five Questions
At this point, you should have a solid idea of how to save cash for your business every month. If you follow the advice above, it won’t be long before you are saving money and feeling better about your company’s financial situation. To better understand what to do next, answer these five questions:
- What are the most expensive items in the company’s budget?
- Which areas of the budget can be cut back on without impacting quality and service?
- Are there any expenses that can be done away with altogether?
- Is there a system in place for tracking expenses and savings in the future?
- Which employees can help the company save money on a monthly basis?
It may sound impossible to cut back on expenses and save cash for your business, but the right approach can put you on the path to future success.