Whether you have been self-employed for years or you are just starting your first business, the key to profitability is keeping your expenses as low as possible. Fortunately, there are numerous resources available to help you achieve this goal. The Small Business Administration(SBA) provides a wealth of resources for people who own their own business or who are thinking of starting one. If you feel overwhelmed by deciding where to cut expenses, consider focusing on one area at a time. For most business owners, the biggest expense categories include advertising and promotions, rent, office supplies, insurance, employee salaries and benefits, taxes, and purchasing inventory. Once you have made noticeable progress in one area, you can move on to the next. Be sure to add up your savings as a way to motivate yourself to do even better.
Use as Little Paper as Possible
Rather than send customers invoices and advertisements in the mail, scan the information you need into your company computers and send it as an email attachment. You just want to ensure that you have permission to contact your customer by email before proceeding with this idea. You can also save money internally by transitioning to a paperless method of paying your employees. Although some employees may balk at receiving their paycheck by direct deposit, you have the right to issue payment however you see fit. For those workers who can’t or won’t get a bank account, you can issue their entire net pay onto a reloadable debit card. Instead of handing our paper pay stubs, require your employees to access this information online. This gives them the option to print a copy of their salary information while shifting the cost of doing so to them.
Don’t Rent More Space Than You Need
Even if you operate your business from home the majority of the time, you may still need access to offsite office space on occasion. However, there is no need to sign a long-term lease for space that you might not use on a daily basis. A better solution might be to rent a furnished office suite only during the times you need it. Besides saving money, you can avoid being stuck at one place for six months or a year if it turns out not to be a good fit. Most companies that offer temporary office suites provide you with receptionist services and a place to receive your mail. Another option is to set up a virtual office from home.
Be Smart with Business Credit
When the cash is slow to trickle in, it can be tempting to put most or all of your business expenses on a credit card. Unfortunately, this is the fastest way to go into debt, and you should avoid it if you can. You should also avoid taking out a business cash advance unless you are certain you have the incoming accounts receivable to repay it. If you must use credit cards, be certain to compare features carefully and read the fine print. Most credit card companies offer teaser interest rates to get you to switch from your current card. There is nothing wrong with taking advantage of those rates, as long as you understand the terms after the introductory rate expires.