7 Ways Small Business Owners Can Save Money
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As a small business owner, your job is to maximize your company’s profits, and one way to do so is through cutting costs. Therefore, you should review your budget regularly to determine ways to shave expenses.
What can you do to minimize your costs and maximize your bottom line? Here are seven clever ways small business owners can save money.
1. Identify Energy Vampires
In one year alone, residential and commercial buildings lost $20 billion right out the window due to escaped heating and cooling. If your staff members complain about drafts on winter days, they’re providing you with valuable intel on one way to shave your company costs. Sit down with your accountant and figure out the best time to upgrade your windows to improve energy efficiency and minimize your tax burden.
Keep this tip in mind even if you work out of your home. For example, a home office that sits above your garage can leave your feet freezing, prompting you to crank up your thermostat. While you can’t deduct the cost of insulating the space below like you could in a commercial building, you can save money on your whole home’s heating costs.
Seek smaller upgrades that can still create a substantial impact. For example, installing a master switch that powers off multiple office lights can save you utility costs by making it easier to remember to shut down before departure.
Do you want an easy way to retain your best staff members while cutting costs? If you switched to telecommuting during the pandemic, why not extend this business model as things return to normal? You’ll save significant money when it comes to replacing employees, 40% of whom would rather quit than return to a full-time commute.
You can also save money with this method when it comes time to renew your office lease. Having more remote staff means a lower space requirement. Additionally, you won’t have to keep the lights on in all those empty rooms. Downsizing could save you thousands in monthly costs.
3. Go Paperless
Felling trees to produce paper costs the planet more than 15 billion oxygen-producing trees every year. The earth needs all the foliage it can get to decrease carbon emissions.
You can increase your corporate sustainability quotient and shave expenses by going paperless. Each ream saves you $10 to $20, and the perks can add up quickly if you have multiple employees. Plus, using technology minimizes the risk of data loss from natural disasters like fires and floods — your proprietary information remains safe in your cloud server if the worst strikes.
4. Embrace Low-Cost Marketing Solutions
You don’t need over $5 million in your advertising budget to buy a Superbowl ad spot. Today’s connected world offers more low-cost marketing avenues than ever before.
For example, your firm can harness the power of the internet, advertising through social media outlets. Small details, like a well-designed business card and brochure, grow your presence in your local community. Of course, word-of-mouth is the best marketing tool of all — and it’s free. Treat your customers with respect, and they’ll do much of your promotion work for you.
5. Understand Your Tax Obligations
One reason that small businesses fail is not understanding their tax obligation. The firms that most often get into trouble have employees. You need to withhold Medicare, Social Security and federal income taxes from your workers’ paychecks and deposit them quarterly. Failure to make timely federal tax deposits can result in penalties that bankrupt your business.
Even though you might outsource your payroll, you remain ultimately responsible as the business owner — the trust fund penalty can impact your personal finances even if your company folds. Ensure your accounting department accurately and timely files your quarterly tax deposits.
6. Shop Around
When was the last time you met with your insurance carrier to discuss your changing business needs? You might need to adjust your coverage if you recently added new vehicles to your company fleet or downsized office space after going virtual during COVID-19.
Likewise, discuss costs with your suppliers. Can they offer you greater discounts for bulk purchases?
Finally, the new nature of the workforce presents another way to save money. Minimize the number of employees you have and outsource as much labor as possible to independent contractors.
Doing so provides you with substantial benefits. You don’t have to pay worker’s compensation or unemployment for such laborers, resulting in direct cash savings. Plus, you lower the burden on your accounting department.
Small Business Owners: Save Money With These 7 Tips
If you’re a small business owner, you can maximize profits by minimizing expenditures. Save money with the above seven tips.