As a small business, you have to watch your expenses on a day to day basis to ensure you stay afloat. Starting out with your own company can be a very delicate balance between profit and loss, so it’s crucial to be aware of how you can lower your small business expenses to make it over the long haul. However, cutting out the wrong things could spell disaster. Here are some do’s and don’ts on what to cut and what not to cut when it comes to business expenses.
Don’t Cut Back on Advertising
When cash flow is tight, many businesses feel that marketing efforts should be the first to go. However, this isn’t always a wise move. Even though you know you can stay afloat with your current customer base, it’s important to keep laying the foundation for expansion even during times of economic duress, says Bankrate. When you maintain your marketing approach even through tough times, you will be in a perfect position to pick up new customers when things start looking up again — and they will.
Never Nix Safety or Quality
While it can be tempting to cut back on the amount of time you change filters or put on safety seminars, this is the last thing you want to cut. Anything that affects the safety or health of your employees is a must-keep. That goes for quality, too. Trying to cheap out by using lower quality and less expensive materials means you are creating a lesser product for the consumer.
Downgrade the Computer System
If it’s coming close to the time to replace your computers, go with netbooks or smaller laptops. They’re less expensive but they still maintain efficiency, are more portable, and will maintain the level of quality output that you’re used to.
Keep Track of Expenses
According to Tara Energy, in order to find out where you’re spending too much, keep track of everything going out and coming in. For three months, cut back on the superfluous things that are bilking you of money. Just like a financial planner would tell a client to cut back on daily cappuccinos or that weekly mani/pedi, do the same from a business standpoint and stop spending on fluff.
Cut Out the Gadgets
Sure, it may have seemed productive and cool at the time to give all your employees a personal smart phone with an expense account when they signed on, but this is definitely one area in which you can reduce spending. Consider the fact that your employees are spending a lot of their time — on your dime — reading personal emails, surfing the web, and playing games on those phones. While you’re at it, call your data service provider for your own phone and negotiate better rates to save as much as you can. Telecommunication expenses can eat up a lot of your budget, so this is a great place to experience some savings.
Create a Vested Interest in Your Company
Rather than hire employees with a base hourly wage plus commission, hire them on a commission-only basis to instill performance-based incentives that encourage them to gain a vested interest in your burgeoning business. If they put in the time and hard work, it will pay off later for them, and for you!
This article was contributed on behalf of Tara Energy, Houston’s power provider. Check out their website today and see how they can help you!
