The start of a new year is one of the best times for a business owner to examine their budgets and find ways to both try and increase revenue and lower business expenses. Oftentimes, cutting a little bit in a few areas can have just as much impact as cutting a lot from one or two budget items.
With these considerations in mind, we’ve put together a list of nine ways to trim business expenses from your 2016 budget and make your year more profitable:
1) Reduce Energy Consumption
Reducing energy consumption can add up to big savings over time. Make sure computers and other office equipment are set to go into low-power modes after working hours are over. Install energy-efficient lightbulbs, and (if possible) utilize hybrid engine vehicles if your business requires lots of driving or deliveries.
2) Work From Home
Working from home is becoming increasingly popular not just for its convenience, but also for its correlating reduction in businesses expenses. Money saved by not having to pay for office space and all the associated costs that come with it can be saved or reinvested in other areas.
3) Take Advantage Of Early Payment Discounts
If your business relies on suppliers, make a note to see if any of them offer a discount for paying invoices within a specified period of time. For example, some suppliers will offer discounts up to 2% if invoices are paid within 10 days.
4) Reduce Travel Expenses
Company getaways, conferences, and trade shows can be a lot of fun and beneficial to building your business — but they’re also expensive. This is a good time to re-examine your travel schedule (and budget) to see if there’s anything that can be skipped this year.
5) Look For Cheaper Office Space
Another benefit of the rising adoption of working from home is that in many areas it has created an abundant supply of office space with diminishing demand. For business that do need office space, this is an excellent time to shop around and see if a better deal can be had.
6) Buy Used Instead Of New
Desks, chairs, copiers, and many other core items that make up common business expenses can be purchased used rather than new. Find a few reputable office furniture dealers in your area and inquire about used inventory.
7) Pay In Trade
If you business is strapped for cash, or you’re just looking to shave costs any way you can, see if the products and/or services you want can be paid for in trade — by offering to exchange your product or service for theirs. It’s important that both parties feel the exchange is fair, but otherwise it’s a great way to save money.
8) Don’t Overstock Supplies
It’s easy to walk into big-box office supply stores and come out with a year’s worth of office supplies. It may seem like a bargain at the time, but you can reduce costs by keeping a closer watch on what you’re actually using and making sure only those items are replaced.
9) Cut Taxes
It pays to be diligent about documenting legitimate business expenses so that when tax season comes around, you can ensure that you’re getting credit for all the deductions you can. Work with a competent CPA and let them help you if you’re not comfortable doing it all on your own.
Working Smarter, Not Harder
Reducing business expenses often means taking a step back and carefully examining your existing processes and seeing if there’s room for improvement. As your business grows, things that worked in the beginning may not make sense anymore and end up costing more money.
Stay vigilant and keep an open mind about alternative solutions and you’ll find ways to save money you never expected.