Your business costs can increase by up to 10 to 20 percent per annum. For example, companies can expect the price of their favorite airline tickets to rise after an increase in oil prices. Your supplier can also decide to increase the cost of supplies by 5 to 10 percent. Increases in expenses can make it hard for small businesses to control their costs. Fortunately, the following tips can help a small business cut its costs and improve its bottom line.
Cut Staffing Costs
Small businesses experiencing slow periods can improve their performance by reducing their staffing costs. You might be surprised to know that your workers would be willing to take unpaid time off. Startup owners should enlist the help of their family or friends whenever possible to cut their staffing costs.
Lower Your Office Space Costs
Startup owners can cut their office space costs by negotiating for better lease terms or relocating their offices to an affordable facility. You can also decide to go mobile or operate your business from home. That can help save on utilities, taxes, and insurance. However, some preliminary research may be required before converting a business to a home-based enterprise. Your local bylaw or zoning regulations could prohibit such activities in your area. Also, consider how the enterprise is likely to disrupt your family.
Cut Vehicle Expenses
The cost of servicing and fueling business vehicles can sometimes be astronomical. However, small businesses can address this issue by reducing their transport expenses to essential travel only. The cost of buying a brand new cube van or truck can be a wallet-buster.
So, consider finding a used vehicle that is in decent condition. Leasing a car could be advantageous to a business that has just started or operating on a tight budget. Leased motorcycles can be returned after the end of the lease period and may not incur maintenance, motorcycle injury attorneys, and depreciation costs.
Cut Advertising Costs
Studies claim that most businesses can spend approximately 5% of their income on marketing. However, the figure can be higher for service businesses that are just starting. However, with the advent of social media, online marketing no longer has to be expensive.
Startups can begin building their online presence by tweeting about their businesses, posting on Facebook and Instagram, and creating a website. A restaurant can send its target audience weekly email newsletters with specials of the week and menu selections. Asking for referrals and cold calling could also be inexpensive ways to advertise a startup.
Switch to the Cloud
Cloud computing can be an excellent way for a startup to reduce its IT expenses and capital costs. Gone are the days when startups could invest in expensive on-site servers. The cloud can allow small and large businesses alike to access the latest business apps. It can also enable startups to increase their storage and bandwidth on demand. Cloud vendors can free startups from the need to invest in sophisticated IT infrastructure by taking care of most of their data recovery issues.
Minimize Your Tax Bill
Businesses operating on a tight budget can improve their bottom line by keeping the taxman at bay. It could mean maximizing all your business expenses. Getting in the habit of recording vehicle mileage and keeping receipts can help track your business expenses and maximize your tax deductions.
Business expenses can fluctuate based on the economic state. An increase in oil prices can result in the rise in the cost of air tickets, which may make it hard for a startup to manage its expenses. Luckily, maximizing your tax deductions and cutting vehicle expenses can help small businesses keep their costs in check.
Moving to the cloud and using online advertising platforms such as Facebook and Twitter could also help a startup control its expenses. Startups can lower their office space cost by relocating to a different place or negotiating for a better lease term.