The cost of doing business is rising. Even if you primarily trade online, you’ll still have a tax bill to pay, as well as the cost of employing staff unless you work alone. Business expenditure reduces profits, so the more you spend on utilities, equipment, and taxes, the less money profit you make. Luckily, there are several ways to save money, and all of them will generate results fairly quickly.
Renegotiate Supplier Accounts
Analyze every cost incurred by a supplier. These include office stationery, utility bills, cleaning, travel expenses, and more. Itemize all your expenses over the last 12 months and look at where you can save money.
For example, if you or your employees do a lot of traveling for business, to visit clients, or similar, there are probably lots of areas where you can cut costs. Flying economy class and staying in cheaper hotels is one area that will yield big savings, but there are others, such as using a travel agent that has access to bigger discounts or traveling less.
Speak to all of your suppliers and see if you can renegotiate your contracts with them. Depending on how much business you send their way, there might be wiggle room. And if a supplier won’t budge on their prices, look for an alternate one that’s more willing to negotiate in return for your business.
Move to Smaller Premises
Since Covid, many businesses have switched to a hybrid model of working. This makes sense for a lot of reasons, but the biggest one is that it can save businesses substantial sums of money. If your staff can easily work from home, allow them to do so. Modern technology makes it very easy to manage remote teams and keeping in touch via apps like Zoom or Slack will aid communication.
Once you have reduced the number of people working full-time in the office, look at downsizing to smaller premises. Instead of permanent workstations, implement hot desking instead. Running your business from a smaller office will save you a lot of money in rent, energy costs, and more.
If you can’t downsize, consider relocating to an office in a cheaper area, where rents are lower. Alternatively, look at serviced offices where businesses share office space in one large building. Costs are fixed as they are included in the rental agreement, and you have access to meeting rooms and breakout spaces. This type of arrangement works for smaller businesses, so why not give it a go?
Unless you are a qualified accountant, it is very easy to miss opportunities to save money on state and federal income taxes. Tax breaks like the Research and Development tax credit are not always well-known but can save businesses a lot of money, as explained in this link – https://tri-merit.com/services/research-and-development-tax-credits.
Work with an accountant and they’ll help you save money on your tax bill. It’s a win-win.
Instead of focusing exclusively on finding new customers, spend a bit of time looking for cost savings. The leaner your business becomes, the more recession-proof it will be.