Small business expenses and how to reduce them

By Henry Brown

Running a small business can be expensive. You may feel as though you are constantly having to monitor expenditures, and if you are not careful, you may even end up going into debt.

Wages

If you don’t have a team of trustworthy employees, your business won’t last very long. If you are just starting out, the first thing you need to do is decide who is going to be on your team and the responsibilities that they are going to have. There are plenty of sites out there that give you the chance to work out the average salary you should be paying people. You can even estimate the cost of the benefits you have to offer as well. If you want to keep the cost down, you should only take on people who you actually need. If you want any additional support, then look into hiring a freelancer or an independent contractor.

Rent

Your rent will quite possibly be your biggest predictable expense. If you have purchased a building via mortgage, you will still need to make the payments and along with property taxes too. It doesn’t even matter how big your business is either because you will still have to cover this expense. If you want to save money, try and keep your space as small as possible. You might also want to sublease your commercial space if possible, as this will help you to really make the most out of your budget.

Equipment

Your business will need equipment. It doesn’t matter whether you need manufacturing pieces or whether you just need to invest in a traditional copier and printer because you need to account for this as much as possible. If you want to save money, try and work with suppliers who are willing to negotiate on price. This is especially the case if you work in an industrial or manufacturing industry because the cost of equipment can quickly add up. You should also try to buy compressor valve parts or other necessary parts online where possible, as items like this can often be found for a cheaper price by searching elsewhere.

Utilities

The ongoing cost for a monthly business will really eat away at your budget. You need to plan for things such as water, electricity, gas, office supplies and your internet too. One way to save money here is to go green. This will make your business way more appealing to your customers, and it will also make it easier for you to invest in your own future. Going paperless is another option because it will keep your office clutter-free and it will reduce printer supply expenses.

Theft

Your office will always be somewhat vulnerable to criminals. You should be aware of cybercriminal threats too because the only thing that it takes is for you to have a single password compromised. If possible, you do need to invest in your security policy because this will help you to lower your insurance costs. Think about installing security cameras or about educating your employees about the risks of not changing their password regularly.

Other losses

It’s so important that you think about lawsuits, natural disasters or even sudden market changes that could impact your income. You can insure against some of these risks. You can easily reduce your insurance rates by getting policies with the same company. You do, however, have to make sure that you are not compromising the service that they offer by doing this.

Professional fees

Some entrepreneurs like the idea of trying to take care of everything themselves. This can be good, but it can also lead to disaster. You should never try and handle anything to do with the law, tax or even complex disciplines yourself. You need to hire someone who knows what they are doing, even if this involves paying a steep hourly rate. Ask other local business owners in the area to see who they use and also ask them why. When you do this, you might be able to save a good amount of money and the other person may even get a referral bonus.

Business marketing

To generate more leads for your business or if you want to generate more interest, you need to focus as much as you can marketing. Not all strategies are the same, so it helps to track your results to find out which one is working best for you. Of course, social media is completely free to use, so this is a great way for you to get started.

Memberships

Depending on the type of industry you work in, you may need to pay a membership or even some kind of association fee. You may also need to pay so that you can get certified too. This can be difficult to say the least, and it can be expensive, but sometimes it is required if you want to become the professional you want to be.

Travel expenses

If your business involves travelling to meet with clients, you need to account for this. You will also need to reimburse employees for their travel as well. Keeping the cost low here is crucial because this expense can quickly add up. Some companies will give you discounts if you always use their hotel or even their transportation lines when you do travel, so it is worth looking into this. You may also be able to get a business discount card, so you can cut down on the amount of expense that you have to pay each time you make a booking. Things like this can have a huge impact on your company expenses as a whole.

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Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

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