The business world is a competitive industry. Many small business owners and entrepreneurs get lost in the shuffle because they do not know how to make themselves stand out from everyone else. Broadcasting what makes your product unique helps you stand out to your customer base. Reducing your business expenses lets you stand on your own, separate from your competition.
While it is not uncommon to overpay for business expenses, you can avoid many of them by checking your insurance, capitalizing on tax deductions, comparing real estate, performing utility maintenance, and performing other smart business leader decisions that will be discussed below.
Many businesses end up overpaying for insurance because they do not take the time to shop around. It is easy to get in a comfortable routine with paying the bills to a primary insurance holder and never looking for better deals. This is especially prevalent when working with someone you know. Just because they are an acquaintance or friend, does not mean they are offering you the best insurance rate available. At the end of every insurance period, it is wise to shop around and find if you can get better coverage for less.
Approximately 30% of small businesses are overpaying for their taxes. You are entitled to more deductions and credits than you might think. Investing in wealth-building assets off the best long-term growth potential without taxing your income. Putting savings into retirement accounts like 401(k)s and health savings will also give you an immediate tax advantage. Charitable contributions and expenses can also be itemized, including the expenses incurred while participating in a charitable activity. Every penny counts and a sound tax strategy can help you save more pennies than you might think.
It is not uncommon to pay too much for your real estate. If you are renting, many landlords will escalate your rental contract or overcharge you monthly. Many contracts have an option where if paid upfront instead of on a month-to-month basis, you can save hundreds of dollars a year. Keep an eye on the facility you are in and how much you utilize. If there are rooms or floors that you rent/own and don’t use you are wasting money. Turn your real estate expenses around by renting out the extra space to other tenants and make an additional profit.
Most businesses are caught in a trap of overpaying for their gas and electricity bills. Overpaying utility bills is avoidable. Depending on the facility’s location, there will be different providers who offer different rates for energy and gas. Don’t be afraid to switch providers or renegotiate your contract. Performing certain maintenance tasks can also help your facility function better which will help save utility costs. Replacing your HVAC system will increase comfort, efficiency, and protect you from unpleasant or dangerous odors. A comprehensive inspection can help reduce HVAC costs. Performing periodic minor maintenance will increase efficiency and ultimately save you from extensive repairs later down the road.
The COVID-19 pandemic taught people that business travel is not always necessary. In its place, free video conferencing services appeared which allow you to communicate in real-time with people around the world. This new change in the business world is great, but many businesses are still overpaying for these services. Teleconferencing services do not need to cost an exorbitant amount of money, services like Zoom and Google are cheap (in some cases free) ways to meet with people for business. Stop overpaying for travel expenses or expensive conferencing programs when there are much better alternatives available.
In today’s world, your marketing and advertising can reach a massive audience without costing a fortune. Print ads, billboards, TV commercials, radio spots are expensive and becoming less relevant. Advertising on social media profiles and online is virtually free and you can better target your exact audience. You are also more likely to gather engagement and increase SEO when you invest in online advertising. Create profiles for your business on every social media platform and post them often. What sales are happening, promotional offers, new products, etc.
Finance charges are a complete waste of money. There is no point in paying late fees and bank charges which is the equivalent of just throwing your money away. Every business owner needs to keep track of their finances and when fees are due. Perform audits on your books frequently. If there are services you are paying for but not using, cut them out immediately. Scanning your books will help you identify services not being used, stay on top of payments, increase your credit score, and decrease your debt. Taxes and utility expenses are required to run a business, unnecessary finance charges are not.
Many small businesses have a misconception that you get what you pay for. When it comes to employees, that is not always true. Overpaying for employees is a common mistake. To get truly qualified employees offer good incentives like great benefits, vacation time, insurance plans, and flexibility. Offering these kinds of benefits is more likely to attract high-quality employees than those who are just in it for the money. If your business is slow, rather than paying for many full-time employees you may consider hiring temporary workers or cross-training your employees to handle multiple jobs. In the end, this will give you better workers for less money.
As a business owner, keeping track of business expenses is a lot like regulating personal expenses. There is no point in paying for a gym membership or Netflix subscription if you never use them. Phone services and car insurance are flexible depending on the provider. Similarly, to cut down unnecessary expenses, your business needs to shop around for better deals and cut off the black hole money pits. Knowing where you can save money will give you the flexibility to invest in more profitable areas. These investments will set you apart and increase your possibilities for success.
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