So your small, work-from-home business has really taken off, but now you are interested in cutting back on your expenses to maximize your profits. Whether you want to save money to re-invest in your business in the future, or if you simply want to use the extra cash to contribute to your local community, take a look at these helpful tips for saving money in your small business.
Business Credit Cards
Try consolidating all of your outgoing business expenses into a single, easily tracked business credit card account. Credit card companies like to compete for your business, which is why many cards offer cash back rewards of as much as five percent. If you have a business that requires a lot of transportation expenses, consider a card that rewards you with airline miles or fuel discounts at certain gas stations.
As an added benefit, business credit cards can help you cut down on the time you spend tracking your expenses and balancing the business checkbook. By logging onto your credit card online account, you can easily see how your company is managing money, and where there may be excess spending. Also, although it is best to pay off your business credit card account each month, if you do carry a balance over from month to month, the interest you accrue on business expenses are fully tax deductible.
Coupons are not reserved only for stay-at-home moms who need extra spending money. Instead, coupons and discounts can give your business a significant financial boost when used on a regular basis. For example, websites like Groupon and LivingSocial may offer online coupon discounts on local oil changes and tire rotations for company vehicles. Also, there is no shame in finding coupons or taking advantage of daily specials for local restaurants. Even if your business lunches are tax deductible, who says you have to spend an arm and a leg on them?
Re-Evaluate Your Marketing Strategy
If you are like many businesses, your marketing expenses may require one of the greatest portions of your overall business budget. To cut costs without losing business, consider re-evaluating your marketing strategy. Instead of spending a lot of money advertising in outdated media, such as phone books and television commercials, consider boosting the organic traffic your business gets by improving your website for better search engine rankings, or offering an in-house referral program for your existing customer base. You may see an increase in traffic without spending as much money to get new customer business.
Try to eliminate as much paperwork and printing costs as possible by using email instead of traditional mail. Think of the savings you can accrue without purchasing stamps, envelopes, ink cartridges, filing cabinets and paper. Furthermore, paying bills and corresponding with customers and vendors electronically is quickly becoming preferred over traditional ways of communicating. You may even be able to reduce your travel expenses by using Internet meetings via Skype or similar programs, rather than meet with potential vendors, clients or employees in person.
Eliminate Unnecessary Inventories
Evaluate your business inventories to determine which items are most profitable for your business, and which ones are not as necessary. Focus your inventory on items that sell or are most essential to your business, and stop buying items that do not move as quickly. The reduction in inventory will reduce your overhead costs, meaning more money in your pocket — and ultimately more to invest.