Running a successful small business is difficult. The costs are high, the competition stiff, and the margin for error slim. Controlling business spending goes a long way to helping a business survive and is one of the big reasons most businesses close up shop before they hit the five-year mark. Companies are always in a race to generate revenues faster than they pile up expenses.
Businesses may ultimately fail for many reasons, but crippling business spending doesn’t have to be one of them. Most companies have plenty of places where they can trim the fat and take a leaner approach to operations, maximizing profits. Here are some easy ways any business can cut expenses:
Controlling business spending
Keep Interest-Accruing Debts Low
Businesses might be leery of paying off debts quicker than they need to, especially when they’re concerned about their cash reserves. While you never want to get too cash-poor when running a business, it’s smart to pay off debts as fast as you can to avoid accruing interest needlessly, according to The Wall Street Journal. By paying off debts before you absolutely have to, you’ll save on interest expenses and keep your liabilities low.
Use Cost-Effective Software to Manage Payroll and Accounting
Your business spending too much relative to revenues? The odds are good that your accounting has been lacking. Most small businesses can’t afford dedicated payroll and accounting staff, but managing funds is still a critical to any company’s success. Fortunately, new software innovations make it easy to manage payroll and accounting on your own, enabling you to outsource these tasks to technology at a much lower cost than adding staff. Companies like Intuit Payroll offer resources to manage a variety of finance-related tasks, saving money and giving you a better idea of where you’re company’s capital is.
Telecommuting is often promoted as an employee-friendly policy, but it has tangible benefits to business spending. By letting employees work remotely one or more days a week, you cut out commuting time and give them greater flexibility in getting work tasks done on time, increasing productivity and avoiding the sunk cost of wasted time. Meanwhile, telecommuting cuts down on operational expenses like electricity and supplies consumption, providing a small reduction of your office costs.
Pit Suppliers Against One Another
Suppliers are essential for most businesses, but you need to remember your value to the supplier. As a customer, you’re well within your bounds to ask for a special discount or for price matching, according to MoneyCrashers. Pitting suppliers against one another in a bidding war for your business may not be the most fun experience in the world, but it could save on your supplies expenses. Don’t be afraid to play hardball to get a better price.