When you’re running a small business, expenses can add up quickly—and paying yourself is the last item on the list. Going overboard on expenses, particularly before you’ve built up much of a revenue stream, can put your business on the fast track to disaster.
Here are ten ways to cut your expenses before they destroy your company:
Compare vendor costs
If you didn’t carefully research competitors’ prices when signing with vendors, you may be spending far more than you need to for a standard service. Look at online cmparison search engines for services like web hosting, credit card processing, and other vendor services to see if you can find a lower rate.
Cut back on energy usage
Be sure that all of your staff turns off computers after leaving the office for the day, and turn off lights at night—consider switching to LED lighting to save additional costs on electricity. Although such actions may not make a huge difference in savings on a day-to-day basis, they can save hundreds over the course of a full year.
Curb your business travel costs
Save money on business travel expenses like flights and hotels by using online booking through discount services like Hotwire and Priceline. More importantly, take the time to weigh up whether a business trip is really necessary: Must you meet in person, or could you discuss the matter through online videoconferencing technology instead?
Buy second-hand equipment and furniture
When setting up your office, purchasing equipment like desks, office chairs, and computers can cost a lot of money. You can save more than half of this cost by purchasing items used or on special: Keep an eye out for furniture liquidation sales or stores going out of business that are selling their assets, and look for refurbished computers and other electronics available through manufacturers’ websites.
Store your data in the cloud
Instead of purchasing expensive servers to store your company’s files, you can save a considerable amount of money by storing data online in a cloud-based server. Instead of paying for the server, you’ll pay a small monthly fee, based on the amount of server space your business is using. For many companies, this small switch can save thousands of dollars each month.
Take advantage of virtual support
Instead of hiring a full-time administrative assistant to handle tasks around the office, you may be able to save money by outsourcing tasks to a virtual assistant (VA). Most VAs are based overseas in countries with lower costs of living, so your expenses are likely to be considerably lower than hiring someone to work in your office.
Barter for goods and services
If your business offers a product or service that another business owner may appreciate, offer a barter exchange. For instance, if you’re a web developer, you might build a site for a graphic designer in exchange for her graphic design services for your own website. Barters are typically considered to be taxable based on their value, however, so be sure to collect any necessary tax and report any barter transactions on your tax documents.
Downsize your office space
Apart from payroll, office space is often a company’s largest expense. If you’re spending more than you can comfortably afford, consider moving to a smaller space or a less desirable neighbourhood. Encourage employees to work from home so that you won’t require as much office space or equipment.
Focus on online marketing efforts
Shifting your marketing campaigns from flyers and postcards to email newsletters and social media will save a lot of money on printing and delivery costs, and you’ll be able to calculate your return on investment more effectively.
Reduce your inventory levels
If you run a retail or e-commerce store, you’ll need to keep products on hand for customers—but purchasing too much inventory at once can be costly, and may take up most of your storage space. Track sales of particular products over several months, and then when it’s time to place a new order, order a smaller amount based on recent sales trends.