Simple Ways to Cut Business Expenses
If you’re struggling to get your business in the black, maybe it’s time you examined some of your expenses to see where you can cut back. Aside from the obvious things like halting the production of promotional items or cutting company dinners, there may be some expenses you may not even realize you can lower.
Refinance your building
If you own the property that houses your business, check into some new mortgage loans to see if you can qualify for a lower interest rate. You may be pleasantly surprised and find that you have much better options than you did when you first made the purchase. Or if you rent your property, ask your local agent to check around for cheaper spaces. You might decide you need less space than you originally thought. Or you might have enough of a customer base, that a less-than-prime location will no longer hurt your business. If that’s not an option, see if you can re-negotiate your lease with the owner, perhaps in exchange for another service.
Re-evaluate discretionary spending
Get strict with your company’s discretionary spending and halt anything that you’re not sure you need. For example, do you pay a coffee company to deliver and set up your coffee area? Your employees may have to start bringing their own coffee for a while. Or do you usually give your building a fresh coat of paint in the spring? It’s probably okay to wait another year to have that done. Be brutal and cut everything out of your budget that doesn’t directly affect your bottom line. Other things that can usually be cut are company memberships, non-essential travel, and client lunches.
Rent out unused space
If you have a building with multiple offices or one that could be divided to make some, consider subletting your extra space to non-competing businesses. If you own your property, this shouldn’t be a problem as long as you speak to your insurance agent about the changes. And if you lease the space, talk to your landlord about your idea. If they agree, they can either agree to reduce your rent or let you keep the proceeds.
Barter your services
If you have upcoming expenses that you simply can’t avoid, try to barter your services in exchange for someone else’s. For instance, if you own an accounting firm, you might offer your accounting and bookkeeping services for a year to a roofing contractor in exchange for them replacing your roof. You’d be surprised at how many businesses are willing to exchange services this way for the same reasons you need to do so. What’s more? Keeping your business’ exterior structure not only adds value to the building, but it lessens the chance of an unwanted liability and the need for a professional, like a Bakersfield personal injury lawyer.
Shorten your work week
Could your business operate just as well if you were to close on Fridays, or a couple of hours earlier throughout the week? If you have hourly employees, you’ll save money on wages. But consider this carefully as losing pay might cause some rifts in employee relations. Or you might find that they would love the extra day off, even with the pay cut. In fact, studies show that six-hour workdays are much more conducive to productivity and employee morale than eight-hour workdays.
Just be sure to speak to your staff first and be as open as you can. Sometimes cutting pay in some way is the only alternative to laying someone off. And if they understand the situation, they will probably be more flexible about their hours and their pay. The other benefit is that you won’t be using your utilities for one more day out of the week which should reduce your monthly bills by more than you probably think.