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Is your small business blowing through entirely too much money every month? If it is, it’s likely biting into your bottom line and causing financial hardships.
You can get around this by thinking about letting a few of your employees go. When small business owners are trying to figure out how to cut expenses, they’ll often start by assessing their staffing needs and seeing if there are any employees serving roles that are no longer needed.
The unemployment rate throughout the country is already surging, though. It’s inching closer to 15 percent at the moment as a result of the coronavirus pandemic. So instead of putting more people out of work to help with reducing business expenses, you should attempt to find other ways to do it.
Here are some of the most effective ways to go about cutting costs in a business.
Downsize Your Office Space
When you first moved into your current office space, it might have been just the right size for you and your employees. But these days, you might have certain parts of the office that are no longer used for one reason or another.
A lot of the equipment that is used in offices today, including things like computers, copiers, and printers, has become a lot smaller over time. That has left many small businesses with extra space on their hands.
You’re paying for that space, even if you’re not using it. So rather than continuing to use the same office space as you’re using now, think about downsizing to a smaller office space with lower rent. It’s a simple way to enjoy reduced expenses from now on.
Make Your Office More Energy Efficient
Regardless of whether you choose to stay in your existing office space or move to a new one, it’s important for you to make your office as energy efficient as it can be. Learn more about how it can be done and then take steps to improve your office’s energy efficiency.
Some great ways to increase the energy efficiency in your office include:
- Using LED lightbulbs instead of incandescent or fluorescent lighting
- Adding new insulation to the walls and attic
- Installing smart thermostats
You might have to make a small investment in giving your office’s energy efficiency a boost. But it’ll be well worth it once you see how much it saves you on your electric bill every month.
Allow Some of Your Employees to Work From Home
Earlier, we touched on how to cut expenses by parting ways with some of your employees. This is, unfortunately, the way in which many small businesses are cutting their costs right now.
You might have to consider this an option at some point. But before you go that route, how about reducing business expenses by allowing at least some of your employees to work from home for the foreseeable future?
You can save a bunch of money by having some employees work remotely. You won’t have to pay for space in your office for them, and you also won’t have to pay for everything that they use while they’re in your office.
You might even be able to cut your insurance costs down to size by having fewer employees in your office every day. And in the grand scheme of things, it could ultimately leave you with happier employees on your hands who do better work.
Reduce Your Insurance Costs
Speaking of insurance costs, when is the last time you reached out to your business insurance broker to see if you have better insurance policy options than the one you have now?
Far too often, small business owners sign up for a business insurance policy when they first open up their company and then continue to renew it over and over again. This can leave them underinsured in some cases or lead to them paying more than they should have to for insurance.
Those small business owners that are trying to see how to cut costs in business should take a good, long look at their insurance policies.
Scale Back Your Marketing Efforts
Generally speaking, the Small Business Administration suggests that small businesses spend about seven percent of their gross revenue on marketing. It’s almost impossible to run a successful small business without marketing it.
That being said, you should try to limit your marketing budget to right around that amount. And if times get really tough, marketing might need to be one of the first things to go.
You shouldn’t ever stop spending any money on marketing. But you should think about scaling back your marketing budget for a few months to experience reduced expenses.
Hire an Accountant to Handle Your Taxes
According to a study conducted a couple of years ago, about one-third of small business owners suspect they pay too much to the taxman every year.
Paying too much to Uncle Sam is, of course, better than not paying enough and getting yourself into legal trouble. But paying too much in taxes each year can also affect your earnings and force you to make budgetary cuts that you wouldn’t have to make otherwise.
To ensure that you’re paying the right amount of money in taxes each year, you should hire an accountant to help you. They can check out your business income versus your business expenses and find deductions that you may have missed on your own.
Learning How to Cut Expenses Can Make Your Small Business More Successful
As a small business owner, your goal is obviously to make as much money as you can every year. If you’re not doing that right now, learning how to cut expenses can change that.
By reducing business expenses, you can put your small business into a better position moving forward. You can also avoid unnecessary layoffs and maintain a positive culture within your company.
Interested in obtaining more tips and tricks that will help turn your small business into a massive success? Read the business-minded articles on our blog to gather the advice you’re looking for.
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