Running a small business can be challenging. Owners must always strike a balance between having the tools they need to run the business and controlling expenses.Some expense areas have a tendency to creep up over time. Other expenses areas (such as technology) have trended down over the past decade, while the correlating line items have not reduced for some small businesses. The following are our top 6 expense items to evaluate for potential savings:
- Payroll and HR-related expenses – For many small business, payroll is their single greatest expense. While you need employees to run the business, that doesn’t mean you can’t trim a little fat from your payroll expenses. For example, comparing your payroll processing service fees. Evaluate your mix of full and part-time as well as exempt and non-exempt employees. Minimizing overtime is another way to save on payroll.
- Benefits and related expenses – Benefits can be very costly, especially medical benefits. While it’s important to provide your valued employees with good benefits, it may be worthwhile to shop and compare rates from providers. Evaluate single-source providers who control costs by offering turnkey, all-inclusive benefits services.
- Communications – If you haven’t already made the leap, you may be able to save money on phone service by moving to a Voice Over IP-based phone solution. Shopping for cell phone plans can also drive down communication-related expenses. Evaluate using free and low-cost alternatives to expensive collaboration and communication software. For example, subscription software such as Slack may be replaced by Facebook’s free version of Workplace.
- Interest – Interest can be killer. If you have to acquire loans to bridge gaps in cash flow or to acquire capital equipment, be sure to shop for the best interest rates possible. Shopping rates and opening lines of credit ahead of time may allow you attain rates and terms that are more favorable.
- Insurance – Insurance is a must-have. However, that doesn’t mean that you have to overpay for it. Shop and compare rates. Look for the best rates and calculate by using multiple deductibles and optional coverages from a variety of providers.
- Taxes – Every dollar of tax you legitimately and legally avoid paying goes straight to your bottom line. It is advisable to work with your accountant or tax professional throughout the year to ensure that you’re in the best tax position possible. Proper tax strategy and planning can go a long way towards helping you save on your corporate and personal taxes.
Shopping and comparing rates may not be fun, but it may go a long way towards helping to control expenses and improving the bottom line.
Need help saving on expenses and optimizing cash flow? Contact Zinner today.