How to Save Money on the Top Business Expenses
What entrepreneur isn’t struggling to keep their business going? If you’re tired of figuring out how to save money on your own, you need real advice on reducing major business expenses.
First, it’s important to understand what expenses can cost you the most. Then we’ll cover the best ways to save in your small business’s budget.
1. Save Money on Taxes
Small business taxes are occasionally complex. It can cover categories of self-employment, withheld taxes, estimated taxes, and more. When you aren’t prepared for these expenses, they might overwhelm or take you by surprise.
However, there are certain ways to save money on taxes. If you have business property or work remotely, make sure to deduct your taxes through rent, mortgage interest, utilities, and even home maintenance expenses.
If you’re meeting with a client at a restaurant or traveling to the client’s office, you can use these expenses to deduct your taxes.
One other method many business owners don’t consider is hiring their children. If your children are at least 14 years old and pay their own taxes, you can benefit from their lower tax bracket.
Essentially, you save money by transferring income from your business to them.
2. Hiring and Retaining Employees
Employees are the backbone of small businesses. They are the key to getting all the work done. However, hiring new employees costs time and money.
On average, it takes 42 days and more than $4,000 to fill a new position. Salaries, insurance, and office space are also the other top factors for small business expenses.
Instead of bringing on an entire team, consider hiring a professional from a staffing agency. They can lease out employees to you and help you save on cash and employee benefits.
When business is slow, you’re wasting money on employees who sit there with nothing to do. Instead, you could hire temporary employees during busier times of the year.
Another way to save money on small business expenses is to hire independent contractors. In general, business owners don’t have to pay or withhold any taxes on payments to independent contractors. You just have to be sure they fit within the standards provided by the IRS, or your business could face penalties.
3. Reduce Major Business Expenses From Office Overhead
Major utilities and office supplies can eat at your budget on an ongoing monthly basis. This is where you’ll have to plan out expenses like water, gas, electricity, internet, and basic office supplies like pens, paper, and ink.
The best way to save on utilities is to go green. For instance, you can save money by switching to energy-efficient lightbulbs.
You could also enforce certain restrictions on how your business uses utilities. For example, ask your employees to shut down all devices and unplug them at the end of the day.
To save money on office supplies, going paperless might just be the solution to keeping a few extra dollars each month. For the printer, buying recycled printer cartridges also saves money since the ink is expensive, after all.
4. Cut Costs in Marketing and Advertising
Marketing and advertisement investments can get expensive when you aim to generate brand awareness, attraction, and leads. But not all marketing strategies are equal. You can reduce major business expenses by focusing on strategies that give you the highest return on investment.
Likewise, traditional advertising can cost a fortune. Instead, you could consider investing in public relations, as it’s much cheaper and more effective.
Another method is to stop paying for advertising and use inbound marketing. You can then focus on getting results by:
- Incorporating SEO (search engine optimization) on your website
- Creating marketing videos and uploading them on YouTube
- Boosting website traffic from social media
5. Traveling and Dining
Do you travel to meet with clients or go to restaurants where you pay for their dinners? If so, these small business expenses can add up quickly and could be costing you a fortune.
Although you can use these expenses toward your tax deductions, you could save hundreds each month by sacrificing these activities. Instead, keep your costs low by having your meetings at the office or doing video calls.
6. Office Rent or Mortgage
One of the major expenses that small businesses pay for is office space. Suppose you own a building? You’re making payments toward property taxes and a mortgage.
If you’re renting, you’re most likely paying a flat rate. You can end up spending several hundred or even several thousands of dollars per month in rent.
To save money on these small business expenses, consider downsizing your space or moving your location to a less-populated area. You also don’t have to run your business full-time from an office building, and you may want to consider subleasing your commercial space.
If you’re paying for shipping costs or sending marketing materials to your mailing list, you can save money in several ways.
Consider sending mail early in the day. Typically, you can expect to get one- or two-day delivery for the price of a first-class stamp.
Or maybe it’s time to clean up your mailing list. You can eliminate nonresponders, place “address correction requested” on top of your mail, and stockpile mail to send out large mailings at once.
If you’re sending out a delivery, an overnight courier can help you save money. Rates with major courier companies are increasingly competitive. However, you can reduce business expenses by waiting a few hours or even an extra day.
Take Action by Being Money-Conscious
Keep these tips in mind to budget and reduce major business expenses. Once you do this consistently while increasing your revenue, you’ll become more profitable in the future. Become money-conscious by gaining more experience in this area. You can continue to improve your financial skills so that it helps you to manage your money in the best way possible.